The Employees’ Provident Fund Organisation (EPFO) has expressed concern over the large number of rejections in higher pension applications compared to the demand letters issued. In a letter dated May 23, the EPFO headquarters alerted its field offices, following instructions from the Ministry of Labour and Employment to audit all rejected applications.
Application Overview and Rejection Figures
Following the Supreme Court’s ruling, a total of 17.49 lakh employees and pensioners submitted applications for opting into the higher pension scheme.
As of March 31, 2025:
- 1.02 lakh applications were returned to employers due to missing or incomplete information.
- 3.68 lakh applicants were issued demand letters requesting additional pension contributions.
- Over 1 lakh pensioners and 47,000 active employees have already deposited the required additional amount.
- 34,500 Pension Payment Orders (PPOs) have been issued, with another 19,000 applications under processing.
Complaints and Missteps in Rejections
The EPFO headquarters has reported numerous complaints from both employees and employers about unjustified rejections. Many of these cases involved minor errors that could have been corrected easily.
In several instances:
- Applications were rejected for reasons not aligned with official guidelines.
- Field officers were seen to be more focused on rejecting applications than helping applicants fix small issues.
The EPFO has now instructed its officers to:
- Adhere strictly to the prescribed rules and guidelines.
- Only reject applications with valid and justifiable reasons.
- Allow applicants to correct minor mistakes instead of rejecting their forms outright.
Pension Rules and Contributions
The Supreme Court’s 2022 ruling allowed employees who were members of the EPF as of September 1, 2014, to opt for contributing 8.33% of their actual salary (beyond the cap of ₹15,000) towards the pension scheme.
If an employee’s EPF account has a sufficient balance, the required amount can be directly transferred to the pension fund. Otherwise, the employee or employer must pay the shortfall.
Some rejections were reportedly due to misinterpretations of the rules, such as the incorrect assumption that EPF trusts do not permit higher pension contributions.
Audit Measures and Revised Deadlines
To address these issues, the Ministry of Labour and Employment has directed the EPFO to conduct an audit of rejected applications. These audits will be carried out by chartered accountant teams listed with the Comptroller and Auditor General (CAG).
EPFO may also deploy its internal teams to review specific cases, especially those involved in legal disputes.
Previously, in January 2025, EPFO had warned field offices about delays in processing applications and had set the following deadlines:
- January 25, 2025, for offices handling fewer than 5,000 cases
- February 7, 2025, for all other offices
- All clear cases were expected to have their PPOs issued by January 24, 2025
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