The Kerala High Court has said that employees who retired after September 1, 2014, cannot be denied a higher pension under the Employees’ Pension Scheme (EPS) — provided the Employees’ Provident Fund Organisation (EPFO) had accepted higher-wage-based contributions from their employers.
The court made it clear that procedural lapses or delays in how those payments were made cannot be used to deny retirees the benefits due to them.
The verdict came after several Kerala-based employees approached the court, arguing that their higher pension claims were unfairly rejected even though their employers had paid contributions based on actual salaries rather than the capped wage ceiling. The EPFO had dismissed these claims earlier, stating that some contributions were made in bulk instead of month by month.
The high court disagreed, ruling that once EPFO accepted the money, it could not later turn around and refuse to grant the corresponding pension benefits. The bench noted that “substantive rights must prevail over procedural technicalities”, underlining that administrative errors or timing irregularities cannot override legitimate contributions.
The order gives much-needed clarity to employees who retired after the 2014 EPS amendments and were caught in a grey area. The court directed EPFO to recalculate and release higher pensions within three months, based on the actual wages on which contributions were made.
At the same time, it allowed EPFO to take separate action against employers if there were violations in the way contributions were remitted. However, such proceedings cannot be used to withhold pension benefits from employees — a distinction the court said was key to protecting workers from administrative fault lines.
For years, the tug-of-war has been between “statutory wage ceiling” contributions — which capped pensionable salary at ₹5,000, ₹6,500, and later ₹15,000 — and “actual wage” contributions, where both employers and employees opted to pay based on full salaries. The latter group expected proportionately higher pensions but were often denied after the 2014 rule changes, particularly when their employers made payments irregularly or as lump sums.
The Kerala High Court’s ruling now clarifies that such procedural flaws cannot nullify an employee’s entitlement once EPFO has accepted the contributions into its accounts.
Experts say retirees who left service after September 1, 2014, should review their EPF and EPS passbooks to check whether contributions exceeded the wage ceiling — and whether EPFO accepted them. Those whose higher pension claims were rejected can now approach EPFO for recalculation, citing this judgment and submitting supporting records such as salary slips, employer contribution proofs, and PF statements.
That said, retirees should remain aware of limitation periods and procedural deadlines before filing fresh claims or appeals. While the ruling provides relief, the fine print still matters — especially when bureaucracy and benefits cross paths.
