The Employees’ Provident Fund Organisation (EPFO) has published the rules and procedures for employees to apply for a higher pension under Employees’ Pension Scheme (EPS).
Earlier in November 2022, Supreme Court had ordered that pensioners who have not applied for a higher pension can do so.
Before the Supreme Court ruling in November 2022, the maximum pensionable salary was capped at Rs 15,000. The Supreme Court had ruled that this limit could be increased to 8.33 of the actual salary. As a result of this, pensioners will be able to receive a higher pension now. The court had extended the deadline to apply for higher pension to March 3, 2023.
Employees’ Pension Scheme
The EPFO administers the EPS, which provides pensions to employees under the organised sector after the age of 58. Employees and employers contribute 12 per cent of the employee’s basic salary and dearness allowance to the EPF.
The employee’s entire contribution goes to EPF, while the employer’s contribution is split between an EPF contribution of 3.67 per cent and an EPS contribution of 8.33 per cent. Additionally, the Government of India contributes 1.16 per cent to an employee’s pension.
EPF applies to all organisations with over 20 employees, while the EPS is applicable to those who are members of the EPFO.
Only employees and employers who contribute on salaries exceeding Rs 5,000 or 6,500 can opt for higher contributions. They also need to be members of the EPFO prior to September 1, 2014 and should have continued as members thereafter.
How To Apply For Higher Pension
According to the EPFO circular, applications for higher pensions have to be submitted jointly by the employer and the employee at the regional office of the EPFO in the manner specified by the commissioner.
EPFO will later announce the URL in which such applications will be digitally logged. Upon logging, a receipt number will be provided to the applicants.
The application will be redirected into the employer’s login portal whose a digital verification will be carried out for further processing, EPFO informed. An e-file will also be generated which will be inspected to verify if the due amount had been received in the pension fund. The applicant will then be intimated through email and/or post.
EPFiGMS (grievance portal) can be used to register grievances after submitting the joint option form and paying due contributions, EPFO said in the circular.
“In case of employees of unexempted establishments, a refund of the requisite employer’s share of contribution shall be deposited with interest at the rate declared under Para 60 of the EPF Scheme. 1952, till the date of actual refund,” EPFO said in the circular, adding that the method of deposit and pension calculation will be notified in detail in a subsequent circular.
As the deadline draws near, and a large number of applicants may opt for higher pension, it is advisable to avoid the last minute rush and submit the joint application at the earliest.