महीना: वित्तीय वर्ष

Circulars on Employees’ Provident Fund declared on December 29, 2022, and February 20, 2023, that eligible employees can submit their applications for higher pension under EPS (Employee’s Pension Scheme). 

As per recent news, EPFO has extended the deadline for submitting applications from May 3, 2023, to June 26, 2023. Hence, if you have missed this deadline for some reason, you now have a second chance at application. 

Find out about the application procedure for EPFO Higher Pension Scheme and more in this blog. 

Steps to Apply for EPFO Higher Pension 

Follow through these steps carefully to apply for a higher pension under EPS, given that you retired after September 2014, or are still working: 

स्टेप 1: Visit EPFO Unified Member or Member e-Sewa portal. 

चरण दो: Click on the option that prompts “Pension on higher salary: Exercise of joint option on or before May 3, 2023”.

चरण 3: On the newly opened home page, click on the option that says, “Application form for joint options – Joint options under erstwhile para 11 (3) and para 11 (4) of EPS 1995 for employees who were in service before 1st September 2014 and continued to be in service on or after 01.09.2014 but could not exercise joint option under the erstwhile provision to para 11 (3) of EPS 1995 to be exercised on or before 3rd May 2023.”

चरण 4: Enter your details such as UAN number, name, date of birth, Aadhaar number, and Aadhaar-linked mobile number, and finally enter the captcha to submit. 

You will receive an OTP (one-time password) on your given mobile number. 

चरण 5: Enter the OTP and validate your details by attaching the required documents. 

चरण 6: Submit your application after checking all the given details 

Upon completion of these steps, you will receive an Acknowledgement Number. Keep it handy for future reference. 

If you retired before September 2014, but your higher EPS pension application was rejected by EPFO, then apply for the same by following through these given steps: 

स्टेप 1: Visit member e-Sewa portal. 

चरण दो: Click on the option that prompts “validation of joint option”.

चरण 3: On the newly opened home page, click on “Application form for validation of joint options”. 

चरण 4: Enter the details required such as PPO number, name, date of birth, Aadhaar linked mobile number, Aadhaar number, and finally the captcha. 

After this, you can follow through the previously given steps for those who retired after 2014 to complete your application process. 

Higher Pension Contribution under Employee’s Pension Scheme (EPS)

Following the 2014 amendment, problems arose concerning pension contributions for individuals with higher salaries. Numerous employees claimed that they were unaware of the opportunity to jointly decide on pension contributions based on their higher salaries. EPFO dismissed the joint option requests from many employees. Without filing the joint option, employers contributed 8.33% of their pension based on the employees’ actual salaries, while the pensionable salary was Rs.15,000.

Consequently, numerous employees filed lawsuits in High Courts seeking increased pensions based on the contributions made towards their actual salaries. The Supreme Court assumed jurisdiction over this issue. Here is a summary of the Supreme Court’s decision: 

The Supreme Court ruled that employees who were enrolled in the EPF prior to September 1, 2014, but did not opt for the joint option, are now allowed to exercise it until May 3, 2023. EPFO has subsequently extended the deadline to June 26, 2023. In the case of these employees, a greater EPS contribution will be calculated from the date they joined.

Eligibility to Apply for EPFO Higher Pension 

In December 2022, the EPFO released a circular outlining the requirements and application process for individuals to qualify for higher pensions. The criteria for eligibility are as follows:

• Employees who retired prior to September 1, 2014.
• Employers and employees contributing to EPS based on salaries over the wage limits of Rs.5,000 or Rs.6,500.
• Employees who chose the joint option specified in para 11(3) of the EPS-95 while being a member of EPS-95.
• EPFO rejected the exercise of the aforementioned joint option.

The circular issued by the EPFO did not include a provision for employees who were part of the EPF before September 1, 2014, but were still employed or retired after 2014. 

According to a ruling by the Supreme Court, such employees were also eligible to apply for an increased pension.

Consequently, in February, the EPFO issued another circular specifying the eligibility criteria for such employees to apply for a joint option and receive a higher pension. The criteria for filing a joint option are as follows:

• Employees who were members before September 1, 2014, and continued their membership after that date.
• Employees and employers who were members of EPS-95 and did not exercise the joint option mentioned in the deleted para 11(3) of the EPS and the amendment made in 2014.
• Employees and employers who contributed to EPS based on salaries going above the wage limit of Rs.5,000 or Rs.6,500.

टिप्पणी: Employees who were members of EPS-95 and exercised the joint options under the deleted para 11(3) of the EPS but did not submit new joint options after the 2014 amendment are not eligible to claim a higher pension. For such employees, EPS contributions will be 8.33% on the maximum amount of Rs.15,000, regardless of their salaries.

Documents Required to Apply for EPFO Higher Pension 

You need to submit the following documents while applying for a higher pension to validate your application: 

• Evidence of the joint option in accordance with paragraph 26(6) of the EPF Scheme, which has been duly verified by the employer.
• Evidence of deposit made into the pension fund for wages exceeding the prevailing wage ceiling of Rs.5,000 or Rs.6,500, as the case may be.
• Documentation demonstrating the deposit made into the provident fund for wages surpassing the existing wage ceiling of Rs.5,000 or Rs.6,500, as applicable.
• Verification by the employer of the joint option following the provision stated in paragraph 11(3) of the pre-2014 amendment EPS.

EPFO Higher Pension Calculation 

Here is the formula for calculating EPFO higher pension: 

Monthly pension = (pensionable service X pensionable salary)/70

Here, pensionable salary indicates the last 60 months’ salary average. 

Pensionable service denotes the number of years for which you made contributions towards your EPS account. 

If you retire at the age of 58 years after you have served more than 20 years of pensionable service, additional 2 years of weightage will be considered. Although, a maximum of 35 years of pensionable service is allowed. 

Let’s understand this calculation with the help of an illustration: 

Suppose, Anuj has exercised the join option. He has an average monthly salary of Rs.35,000. His total pensionable service is for 28 years and he retires at 60. 

As per the formula, his monthly pension will be:

Monthly pension amount = (Pensionable salary X pensionable service)/70 = (35,000 X 28)/70 = Rs.14,000. 

However, you will receive a lower EPS contribution if you don’t exercise the joint option. Let’s understand how below: 

As Anuj has not filed for a joint option, his pensionable salary will be Rs.15,000. Hence, his monthly pension amount will be: 

Monthly pension amount = (Pensionable salary X pensionable service)/70 = (15,000 X 28)/70 = Rs.6,000. 

Thus, you can receive Rs.9,000 more pension by exercising the joint option. 

If you have not yet applied for EPFO higher pension, you should complete all formalities latest by June 26, 2023. However, if you have any complaints or grievances, you can register them at https://epfigms.gov.in/. These matters will be directed to and resolved by a designated officer and overseen by the regional office and zonal office’s officer-in-charge.

पूछे जाने वाले प्रश्न

• Who will review my EPFO application form? 

After you submit the application form, the Regional Provident Fund Commissioner (RPFC) will examine the application forms and accompanying documents. Each application will be registered and digitally recorded, and the applicant will receive a receipt number. 

• What is the benefit of EPFO’s higher pension scheme? 

EPFO’s higher pension scheme is beneficial for individuals who seek a greater monthly pension while not needing a substantial lump sum upon retirement. By contributing more towards the pension, the monthly pension amount increases, but the EPF lump sum provided to the employee upon retirement decreases. However, the monthly pension is subject to taxation, whereas the lump sum EPF amount is exempt from taxes.

• What is the current rule for Employee’s Pension Scheme? 

Currently, employees and employers both contribute 12% of employee’s basic salary, dearness allowance, and retaining allowance (if applicable) to the employee provident fund (EPF). The entire employee contribution is allocated to the EPF, while the employer’s 12% contribution is divided into 3.67% for EPF and 8.33% for the Employee Pension Scheme (EPS).