Higher Pensions

The Employees’ Pension Fund Organisation (EPFO) has commenced the process of evaluating the financial implications of a Supreme Court ruling by issuing letters to individuals who have requested higher pension benefits. The EPFO is seeking a response of Rs 2,000 crore in this regard, marking the initial step in gauging the financial repercussions of the court’s decision. To assess the preliminary financial impact, the EPFO has employed an Actuary to make calculations based on specific assumptions. However, this actuarial assessment will be an ongoing process and will be conducted in batches of 50,000 demand letters sent out. A comprehensive evaluation will follow once all cases have been addressed. Additionally, the EPFO is in the process of establishing an actuarial department at its headquarters to ensure the use of realistic assumptions and to conduct thorough actuarial reviews of reports provided by the valuer or consulting actuary. In total, the EPFO has received 1.749 million applications for increased pension benefits, of which 629,000 have been reviewed. Among these, approximately 527,000 applications required the EPFO to contact employers for additional information or corrections, while around 3,618 forms were rejected. During a recent meeting of the EPFO’s Central Board of Trustees (CBT), it was noted that processing these applications is a time-consuming task, and the actuarial analysis can only be completed after addressing all applications, as per the CBT, which serves as the EPFO’s top decision-making body.