Himachal Pradesh HC dissatisfied over pension fixation issue

The Himachal Pradesh High Court on Tuesday expressed its dissatisfaction over the failure of government authorities to comply with its earlier judgment on pension fixation, holding that the respondents were in contempt.

In the order, Justice Sandeep Sharma underlined that Parliament has already prescribed the formula for determining pension — Pensionable Salary × Pensionable Service ÷ 70 — where pensionable salary is the average wage during the last 60 months of contribution, and pensionable service is the actual period of contributory service.

Despite this, the Provident Fund Office calculated the pension of the petitioners on a pro-rata basis. The Bench observed that the petitioners belong to Category 3 employees, having paid higher contributions, and therefore could not be subjected to a pro-rata formula.

“Application of pro-rata basis in their case is wholly unjustifiable,” the court remarked.

Though convinced that the higher officer of Provident Fund Office is in contempt, the court refrained from passing any punitive order after counsel for Regional Provident Fund Commissioner, sought time. Allowing 10 days, the court directed strict compliance with its judgment, failing which officers must appear in person to explain why they should not be punished for wilful disobedience.

The order carries significant implications for employees covered under the Employees’ Pension Scheme (EPS), 1995, particularly those who contributed on higher wages. Thousands of pensioners across India have raised disputes over whether their pensions should be calculated on actual wages or capped contributions, and whether authorities can apply pro-rata formulas. 

The matter has been posted for further hearing on September 23.