The Last Date To Apply For Higher Pension under the Employees’ Pension Scheme (EPS) is today, July 11, 2023. The deadline has been extended thrice – from March 3, 2023, to May 3, 2023, June 26, 2023, and then July 11, 2023.

In March this year, the Employees’ Provident Fund Organisation (EPFO) issued guidelines regarding higher pensions in compliance with the Supreme Court’s order of November 4, 2022. However, due to a lack of clarity, it had to extend the deadline several times since then.

If an eligible member wants to opt for a higher pension, today is the last day to apply for the same.

Recently, EPFO issued a few new frequently asked questions (FAQs) to provide clarity on the issue, including among others, the documents required, how to apply, as well as the calculation for the pension.

As of now, there is no update on whether the date will be extended again.

Who Can Apply?

Anybody who has been a member of EPS on or before September 1, 2014, and has continued working and has remained a member after this date is eligible to apply for a higher pension.

Also, those who retired from service before September 1, 2014 and had applied for a higher pension, but had their applications rejected, are also eligible. The employees who have not been able to activate their joint option until now can still apply for higher pensions.

How To Apply?

The eligible members have to apply for higher pension jointly with their employer. One can find the link on the EPFO website on the members’ page to opt for higher pensions. The member needs to submit the application, which would be verified by the employer. After that, the EPFO officer will check and verify the eligibility and other details, and inform the member accordingly.

Why Apply?

Previously, there was a salary cap for contributions towards EPS, which was 8.33 per cent of the maximum salary cap of Rs 15,000. But under the new guidelines, members have the choice to opt for a higher pension without any salary cap. This means they will have an option to get 8.33 per cent of salary deducted towards EPS on the actual higher basic salary, and not on Rs 15,000 only.

This would mean a higher accumulation of funds at the end of working years and a good corpus for retirement. But, one must remember that the EPS corpus would be paid as a pension.

The pension is available after attaining the age of 58 years when the contribution is done for at least 10 years in EPS. The early pension option is also available in EPS where one can start taking it after turning 50 years of age, but then the pension will come at a reduced rate. A lump sum withdrawal is available when the contribution has been for less than 10 years.

So, out of the total contribution to social security benefits (EPF and EPS), one must remember that when choosing a higher pension, this comes at the cost of reduced employee provident fund (EPF) accumulation.

One more thing to keep in mind is that after a continuous contribution of five years, the EPF withdrawal is tax-free, whereas the monthly pension received from the accumulated EPS corpus is taxable. Also, one can withdraw EPF corpus in a lump sum at the time of retirement, but this is not the case with EPS. EPS offers monthly pension benefits.

So, based on the individual’s goals and requirements, which are different for everybody, one may choose the best suitable option.