Ajit Karn
New Delhi: The Employees’ Provident Fund Organisation (EPFO) established a deadline of May 3 for members to choose a higher pension.
On November 4, the Supreme Court permitted workers who were current EPS members as of September 1, 2024, to pay up to 8.33 percent of their real wages – as opposed to 8.33 percent of pensionable salary, which is limited at ₹ 15,000 per month – to pension.
The Supreme Court set a four-month timeframe for people to choose greater pensions. Accordingly, the limit should have been around March 3, 2023, but the EPFO only recently published the process for choosing for a greater annuity under the Employees’ Pension Scheme (EPS).
“The joint option for workers who were in service prior to September 1, 2014, and continued to be in service on or after September 1, 2014, but were unable to execute joint option under the Employees’ Pension Scheme, can now be exercised on or before May 3, 2023,” the EPFO stated on its website.
At the moment, both workers and employers pay 12% of their base wage, dearness allowance, and retaining allowance, if any, to the employee provident fund, or EPF.
The employee’s entire payment goes to EPF, while the employer’s 12% share is divided as 3.67% to EPF and 8.333% to EPS.
Employees do not pay to the pension plan, but the government contributes 1.16 percent.
“Online facility for submitting joint choice is arriving shortly,” EPFO said.
Previously, there were concerns that the deadline for choosing for a higher pension would be March 3, 2023.
EPFO released a process last week that allows members and their workplaces to collectively file for a larger salary under the Employees’ Pension Scheme (EPS).
The Workers’ Pension (Amendment) Scheme 2014 was affirmed by the Supreme Court in November 2022. The EPS amendment of August 22, 2014, increased the pensionable wage limit from 6,500 to 15,000 per month and enabled members and employers to pay 8.33 percent of their real salaries (if they exceeded the quota) to EPS.
The EPFO had given for coping with the “Joint Option Form” by field offices of the organisation in an office order. EPFO noted that “a facility will be given for which URL (unique resource location) will be informed soon. Once received, the regional PF commissioner shall place an appropriate notice on the notice board and banners for broader public information”.
It stated that each entry would be recorded, digitally logged, and the candidate would be given a receipt number. It also specified that the office in control of the regional provident fund office involved shall investigate each case of combined choice on higher pay and notify the candidate via e-mail/post and, later, SMS.
It also stated that the applicant’s grievances could be recorded on EPFiGMS (grievance portal) after submitting his/her joint choice form and making any required contributions.
According to the order, these instructions are being given in accordance with a Supreme Court order made on November 4, 2022. In line with the Supreme Court’s ruling, EPFO has directed its field offices to offer qualified users the choice of receiving a higher pension.
The federal government has ordered that the instructions in the order be implemented, according to the EPFO circular dated December 29, 2022. The Supreme Court had allowed all EPS members six months, beginning September 1, 2014, to choose the amended plan.
In its ruling, the Supreme Court extended the deadline for qualified subscribers to choose a higher salary under EPS-95 by four months.
The court also overturned the rule in the 2014 amendments requiring employees to contribute 1.16 percent of their monthly pay in excess of $15,000 per month. This will allow subscribers to pay more to the plan and receive greater advantages as a result.
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The EPFO circular also provided for a higher pension option for eligible subscribers who either contributed on actual wages greater than the 5,000 or 6,500 per month prevalent threshold pensionable salary, exercised their option for a higher pension, or had their request for a higher pension denied by EPFO authorities prior to the 2014 amendment to EPS-95.
The qualified users would have to apply for the increased benefit equally with their boss in the application form given by the commissioner, along with all other necessary papers such as a joint statement, etc.
