The Kerala High Court has recently made an important decision that could benefit many employees who want a higher pension. In the case of Gopinathan Pillai. M. & Ors. v. Union of India & Ors. (2025 KER 15578), the Court has ruled that if both the employee and employer have paid their pension contributions based on the actual salary and followed all the rules, then the Employees' Provident Fund Organisation (EPFO) cannot refuse to give them a higher pension.

Commenting on the larger implications of the verdict, Pooja Ramchandani, Partner at Shardul Amarchand Mangaldas & Co., said: “In this case, the EPFO rejected the joint option exercised by various employees to contribute towards pension on actual salary, on the ground that employer contributions on actual salary were received in bulk and not month-wise. This judgment will help those EPFO members who are pursuing joint applications made for higher pension contributions to receive higher pension benefits.”

Kerala High Court Verdict: EPFO cannot deny higher pension on the grounds that contributions were paid in bulk or delayed:

Contribution as of 16 November 2006 (for the period April 2004 to October 2006): ₹40,03,150 along with interest of ₹1,64,137

Contribution as of 26 March 2008 (for the period October 2007 to February 2008): ₹13,00,684 along with interest of ₹11,879

Tarun Garg, Director at Deloitte India, said, “The judgment passed by the Kerala High Court is a landmark ruling as it directly addresses a common ground on which EPFO has previously denied higher pension claims of employees - namely, that the pension contributions were either delayed or made in lump sum. The judgment would certainly prove to be a win-win for employees as it sets a strong precedent that could help thousands of pensioners facing similar issues and influence other High Courts to adopt a more employee-centric approach and interpretation in such cases.”

“Further, it can be said that the Kerala High Court has reinforced the principle that procedural ambiguities should not override rights, especially when both employer and employee have fulfilled their obligations in good faith,” added Garg.

This recent Kerala HC ruling strengthens employees' rights under Paragraph 26(6) of the EPF Scheme, which allows employees to contribute based on their actual salary - beyond the statutory wage ceiling - if both the employer and employee agree.