The Kerala High Court has issued an interim order directing that the higher Provident Fund (PF) pension currently received by pensioners should not be reduced based on the pro rata condition. The order came while considering a petition filed by N Balakrishna Pillai, a native of Thiruvananthapuram, along with 40 other pensioners. The petitioners challenged the pro rata order issued by the Employees’ Provident Fund Organisation (EPFO) on February 14, 2024, and the subsequent explanatory order on January 18, 2025.
The court has temporarily prevented the EPFO from reducing the petitioners’ pension under the pro rata method for two months. The case is scheduled for further hearing in the last week of March. The petitioners, all retired employees of Travancore Titanium in Thiruvananthapuram, had been receiving higher pensions in proportion to their salaries.
However, they approached the court after receiving notices indicating a reduction in their pension amounts due to the pro rata calculation method. Under the pro rata method, the EPFO divides a pensioner’s service period into two segments–before and after September 1, 2014–and calculates pension separately for each period.
Kerala court stops pension cut
This division effectively reduces the final pension amount by 25% to 35%, as the continuity of the service period is broken. The petitioners argue that the pro rata method cannot be imposed on individuals who have contributed towards a higher pension, which is calculated in proportion to their actual salary. They contend that the pro rata system applies only to cases of statutory pension, where the salary limit for pension calculation was fixed at Rs 6,500 or Rs 15,000.
The petitioners also argue that Clause 11(4) of the Employees’ Pension Scheme does not impose any conditions that justify applying pro rata to higher pension calculations. They claim that splitting the service period into pre- and post-September 1, 2014, for pension computation lacks legal backing and is therefore invalid. The correct basis for pension calculation, according to the petitioners, should be the average salary during the final period of service.
The case will be further reviewed in March as the court seeks to address the validity of the pro rata norm comprehensively. The Kerala High Court’s intervention comes in response to the first batch of cases filed after the PF authority issued its latest clarification order.
