The Employees’ Provident Fund Organization (EPFO) on Monday set May 3 as the deadline for subscribers to opt for higher pension. The Supreme Court on November 4 allowed another change for employees who were existing EPS members as on September 1, 2014, to contribute up to 8.33 per cent of their actual salary – against 8.33 per cent of the pensionable salary of Rs. 15,000 per month – towards pension.
The apex court has given four months time to opt for higher pension. Accordingly the deadline should have been around March 3, 2023, but the process to opt for higher pension under the Employees’ Pension Scheme (EPS) was released by the EPFO only last week.
“Joint option for employees who were in service before the 1st day of September, 2014, and continued to be in service on or after the 1st day of September, 2014, but could not exercise the joint option under the Employees’ Pension Scheme, now or before May 3, 2023,” EPFO said on its website.
At present, both the employee and the employer contribute 12 per cent of the employee’s basic salary, dearness allowance and retention allowance, if any, to the Employees’ Provident Fund or EPF.
The entire contribution of the employee goes to EPF while the 12 per cent contribution by the employer is divided as 3.67 per cent in EPF and 8.33 per cent in EPS. The Government of India contributes 1.16 per cent to the pension of an employee, while the employees do not contribute to the pension scheme.
EPFO said, ‘Online facility to file joint option is coming soon.’ Earlier, there were apprehensions that March 3, 2023, would be the last date to opt for higher pension.
Last week, the EPFO introduced a process to enable subscribers and their employers to jointly apply for higher pension under the Employees’ Pension Scheme (EPS).
In November 2022, the Supreme Court upheld the Employees’ Pension (Amendment) Scheme 2014. The EPS revision of August 22, 2014 had increased the pensionable salary cap from Rs 6,500 per month to Rs 15,000 per month and allowed members with their employers. To contribute 8.33 per cent of his actual salary (if it exceeds the limit) to EPS.
In an office order, the EPFO had made a provision for handling of the ‘Combined Option Form’ by the field offices of the body. EPFO said that “a facility will be provided for which the URL (Unique Resource Location) will be intimated shortly. Once received, the Regional PF Commissioners will put up adequate notices on notice boards and banners for wide public notice.”
Provided that every application shall be registered, logged digitally and a receipt number shall be provided to the applicant.
Further, it was stated that the in-charge of the concerned Regional Provident Fund Office will examine each case of joint option on higher pay and inform the decision to the applicant through e-mail/post and subsequently also through SMS.
EPFO also said that any grievance can be lodged by the applicant on EPFIGMS (grievance portal) after submission of his Joint Option Form and payment of due contribution.
The order states that these instructions are being issued in compliance with the order of the Supreme Court dated November 4, 2022. EPFO has asked its field offices to provide higher pension options to eligible subscribers as per the Supreme Court order.
According to EPFO’s circular dated 29 December 2022, the Central Government has directed to implement the instructions given in the order.
The top court had given six months to all EPS members to opt for the revised scheme with effect from September 1, 2014.
The top court in its order gave four months more time to the eligible subscribers to opt for higher pension under EPS-95. The court had also done away with the requirement of mandating employee contribution of 1.16 per cent of salary above Rs 15,000 per month in the 2014 amendment. This would facilitate the subscribers to contribute more to the scheme and accordingly avail more benefits.
The EPFO circular also provided for higher pension option for eligible subscribers who had either contributed in excess of Rs 5,000 actual salary or Rs 6,500 per month prevailing pensionable salary or exercised their option for higher pension. or his request for a higher pension was rejected. EPFO authority before amendment in EPS-95 in 2014.
Eligible subscribers will have to apply for the enhanced benefit jointly with their employer in the application form prescribed by the commissioner and all other necessary documents like joint declaration etc.