The deadline for employees to apply for a higher pension option with the Employees Provident Fund Organisation (EPFO) is approaching fast, set for Monday, June 26. This deadline has created a sense of urgency among many employees who are still grappling with the complexities of the application procedure. Some are hopeful that the deadline will be extended to accommodate those who need more time to understand and complete the process.
In a landmark ruling on November 4, the Supreme Court granted an opportunity to employees who were already members of the Employees’ Pension Scheme (EPS) as of September 1, 2014, to contribute up to 8.33% of their actual salaries towards their pension. This decision replaced the previous provision of 8.33% of the pensionable salary, which was capped at Rs 15,000 per month.
Initially, the deadline for exercising the higher pension option was March 3, 2023. However, due to delays in releasing the necessary procedure, the EPFO extended the application deadline to May 3. Yet, as the process has proven to be intricate, there are concerns that employees might struggle to meet the current deadline.
Under the existing arrangement, both employees and employers contribute 12% of the employee’s basic salary, dearness allowance, and retaining allowance (if any) to the Employee Provident Fund (EPF). While the employee’s entire contribution is directed towards the EPF, the employer’s 12% contribution is divided into 3.67% for the EPF and 8.33% for the EPS.
It’s worth noting that the Government of India contributes 1.16% to an employee’s pension, and employees do not directly contribute to the pension scheme.
To streamline the process, EPFO has issued an office order detailing the handling of the “Joint Option Form” in its field offices. Regional Provident Fund offices have been instructed to prominently display notices on notice boards and banners to inform the public about the procedure.
Furthermore, EPFO has established a grievance portal (EPFiGMS) where applicants can register any grievances after submitting their joint option form and making the necessary contributions, if applicable. This platform aims to address any concerns or issues that may arise during the application process.
In addition to allowing employees to contribute more towards the pension scheme, the court ruling also overturned the 2014 amendments that mandated employee contributions of 1.16% of their salary exceeding Rs 15,000 per month. This change grants subscribers the flexibility to contribute more and receive enhanced benefits accordingly.
The EPFO circular also outlines the higher pension option for eligible subscribers who had previously contributed based on actual wages exceeding the prevalent threshold pensionable salary. These subscribers had previously requested a higher pension, which was declined by EPFO authorities before the 2014 amendment to EPS-95.
For detailed information on the application process and eligibility criteria, employees are encouraged to visit the official EPFO website at unifiedportal-mem.epfindia.gov.in.
As the deadline looms, it is crucial for eligible employees to carefully review the requirements and complete the necessary steps to opt for a higher pension under the EPS. By taking advantage of this opportunity, employees can secure a better financial future and enjoy increased benefits in their retirement years.
