The Employees Provident Fund Organisation (EPFO) has issued a new set of frequently asked questions (FAQs) concerning the Employees’ Pension System (EPS) to help members of the employee provident fund apply for higher pensions as the deadline drew close. However, in an impromptu announcement late Monday evening, the EPFO extended the deadline, which was set to expire on June 26, 2023, until July 11, 2023.

The EPFO changed the deadline several times to facilitate more people to apply for higher pensions and clear possible doubts regarding higher pensions, given the confusion and the need for adequate information in the public domain.

The FAQs will help them calculate the higher pension and submit the essential documents, among other things, on the EPFO portal. Members can visit the EPFO portal and check the FAQs to clear their doubts concerning EPS. The EPFO has put out some 400 questions and answers in the FAQ section.

But before we explore some of the FAQs, let’s see who can apply for a higher pension.

Who Can Apply For Higher Pensions Under EPS? 

Anybody who has been a member of the EPS on or after September 1, 2014, can apply for a higher pension. Also, those who retired before September 1, 2014, and had applied for higher pensions, but applications were rejected can also apply.

Here are some new FAQ inputs from EPFO:

What Documentary Evidence Will Be Considered As Proof Of Joint Option Under Para 26(6)? 

As per EPFO, the permission uploaded by the applicant under Para 26 (6) while submitting the application for validation of option/joint option will be considered documentary evidence.

If permission is unavailable, the field officer (FO) must verify the following details. The FO has to confirm that the employer share of PF contribution has been remitted to ‘employee’s pay exceeding the prevalent statutory wage ceiling of Rs. 5,000, Rs. 6,500, or Rs. 15,000 per month from the day the payment (and) exceeded the wage ceiling or Rs. 16.11.95 whichever is later, till date/till the date of retirement or superannuation as the case may be’.

Besides, they must verify the employer’s administrative charges remitted, the PF account of the employee has been updated with interest, and documents such as wage details by the employer along with validation of option/joint options application, salary slip or a letter from employer, copy of the joint request or undertaking from the employer, a letter from the PF office issued before September 4, 2022, showing the contribution of higher wages.

As per the FAQs, the ‘Joint Request and Undertaking of employer for permission under Para 26(6) can be submitted by pensioners/members any time before the grant of pension on higher wages in accordance with the decision of the Supreme Court dated 04.11.2022.’

Will The Application Be Rejected If No Documentary Evidence Has Been Submitted As Proof Of Joint Option Under Para 26(6) Of EPF Scheme, 1952? 

As per EPFO, the regional provident fund commissioner (RPFC) will need to obtain any of the documents mentioned above from the employer, and the application cannot be rejected on this ground if it is eligible otherwise.

What Is The Formula To Calculate The Pension? 

As per para 12 of EPS 95, the pension commencement date will determine the calculation formula for pensionable salary, service, and pension.

The FAQs say that if someone is eligible for pensions but retired before September 1, 2014, where the pension commencement date was also before September 1, 2014, the pensionable salary will be calculated based on the average monthly salary during the contributory period of 12 months preceding the date of exit from the membership.

Suppose a person retires before September 1, 2014, but the pension commencement date is on or after September 1, 2014. In that case, the pensionable salary will be calculated based on the average monthly salary during the contributory period in the service for 60 months preceding the membership exit date.

The EPFO further states that for a member, for example, who will retire in 2030, the pension will be calculated based on the provisions of EPS, 1995, prevailing on the date of pension commencement.

Says Sowmya Kumar, Partner, IndusLaw, “The EPFO has released a much-awaited calculation on the higher pension contributions. Members who are still considering opting for the higher pension or those who have already filed the application will now know how much will be transferred from their EPF to their EPS account; the intent is to enable them to make an informed decision. The link to the calculation is available on the Members SEWA portal.”

“This calculation will crystallize the actual amount (including the 1.16% additional contribution from the employers’ contribution and the EPFO declared interest) that will be transferred from the EPF to the EPS account depending on the circumstances, will also inform the employees if they need to make additional payments.

“That being said, the calculation sheet requires the employees to input the monthly wages from the time they joined the EPS scheme, which again presupposes that the employee has the requisite data ready to input into it. For employees who have been in service for several years and are now close to retirement, gathering this data could be cumbersome and will require some administrative support,” Kumar adds.