EPFO: Individuals anticipating an increase in their pension from the Employees Provident Fund Organization (EPFO) may soon face disappointment. Following a directive from the Supreme Court, the EPFO has commenced the disbursement of higher pensions to eligible members. However, approximately 500,000 individuals may find themselves excluded, as their applications for enhanced pensions could be denied.

EPFO established necessary rules and procedures

In November 2022, the Supreme Court mandated that the EPFO offer its subscribers the option of a higher pension. Subsequently, the EPFO established the necessary rules and procedures, and has begun issuing payment orders accordingly. To date, over 21,000 payment orders for higher pensions have been processed, with an additional 165,000 orders anticipated to be issued shortly. Nonetheless, around 500,000 individuals are expected to be adversely affected.

The EPFO has indicated that a significant portion of its subscribers are employed by companies that independently manage their provident and pension fund contributions. Many of these are trust-based organizations that have received exemptions from the EPFO for fund management. Consequently, the prospects for these individuals seeking higher pensions may be jeopardized.

EPFO has received applications from more than 721,000 employees

According to media reports, the EPFO has received applications from more than 721,000 employees for higher pensions in response to the Supreme Court ruling. However, it is possible that over 500,000 of these applications may be rejected, representing approximately 65 percent of the total submissions. A majority of these applications are likely to originate from trust-based employers, as there are currently no definitive rules governing this matter.

Applicants must meet the initial requirement

To qualify for a ‘higher pension’ from the EPFO, applicants must meet the initial requirement that their EPFO membership commenced on or after September 1, 2014, or, if they were already members prior to this date, their subscription must have continued beyond September 1, 2014.