Madras High Court sets aside EPFO circular, clears path for higher pension claims [9.9.2025]

The Madurai Bench of the Madras High Court, on September 2, set aside an Employees' Provident Fund Organisation (EPFO) circular dated January 18, which disallowed firms managing their own PF trusts to amend their rules retrospectively in order to avail higher pension for their members, in line with a Supreme Court judgment that enabled workers to get a higher pension in November 2022.  

 “The circular issued by the respondents (EPFO) on January 18 cannot be a violation of the order passed by the Supreme Court in the Sunil Kumar case, the same is liable to be set aside,” the order stated.  

The SC, in November 2022, had allowed eligible employees who were in service on September 1, 2014, to opt for pension on higher wages by contributing 8.33 per cent of their actual salary if it exceeded the monthly ceiling of ?15,000. 

B.N. Agrawal, secretary, SAIL-BSP Pensioners’ Association, said it is learnt that many joint options exercised by employees and employers have been rejected by the EPFO. It mainly cited "lame excuses" such as the ceiling on wages in the trust rules of most of the exempted establishments. Exempted firms, under the EPF Act, are companies that manage their employees' PF in-house. At the same time, a large number of joint options, for other exempted establishments, that don't have such a wage ceiling embedded in their trust rules, have been considered by the PF office. 

The HC order now allows any joint option application for availing pension on higher wages presented on or before January 31 this year to be accepted by the EPFO.

The court said that trust rules framed under the EPF Scheme cannot be cited to deny benefits under the Employees’ Pension Scheme (EPS) 1995.

Further, the establishment has not been exempted under Para 39 of the EPS 1995. 

 “The conditions for the exemption granted to the PF scheme cannot be invoked to deny the benefits to an employee under the statutory pension scheme. The exemption has been granted for provident fund, and not the pension scheme, and the employees are integral parts of the statutory pension scheme and fund maintained by the EPFO, independent of exempted firms' trust rules,” said Agarwal.

The Madurai Bench of the Madras HC was hearing a case filed in October 2024 by 86 retired employees of Bharat Heavy Electricals Limited (BHEL) Trichy. They challenged the EPFO orders issued to individual employees on March 21, 2024, recalling a demand notice issued to them for payment of EPS contribution along with applicable interest to avail higher pension. 

The petitioners also challenged a subsequent EPFO circular that did not allow them to amend their PF trust rules with retrospective effect. 

EPFO, in turn, had contended that exempted establishments are governed by the trust rules, not the EPF Scheme. And, the employees have opted in favour of a larger provident fund over larger pension.

It also argued that any payment of higher pension to these employees would result in financial loss to the EPFO.


10 Sep 2025