Now EPFO Subscribers Can Opt For Higher Pension: Key Points

The fresh set of instructions is for the employees who had not opted for pension contributions at a higher wage than the wage ceiling and continued to be in service on or after 1 September 2014.

Written by: Sankunni K

Published: February 21, 2023, 11:00 AM IST

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https://www.india.com/business/now-employees-provident-fund-organisation-epfo-subscribers-can-opt-for-higher-pension-supreme-court-deadline-four-months-5907641/ Copy

Earlier, there were speculations March 3, 2023 could be the last date for opting for higher pension.

New Delhi: The Employees’ Provident Fund Organisation (EPFO) on 20 February 2023, just a fortnight before the four-month deadline set by the Supreme Court, issued a circular allowing employees to opt for a higher pension.

The fresh set of instructions is for the employees who had not opted for pension contributions at a higher wage than the wage ceiling and continued to be in service on or after 1 September 2014.

EPFO TO FIELD OFFICERS

The joint option (by employees and employers) for higher pension contribution can be exercised by:

• The employees and employers who had contributed on salary exceeding the prevalent wage ceiling of Rs 5,000 or Rs 6,500.
• Did not exercise joint option under the proviso to Para 11(3) of the pre-amendment scheme (since deleted) while being members of EPS 95; and three, were members prior to 01.09.2014 and continued to be a member on or after 01.09.2014.

EPFO TO SERVING EMPLOYEES

• Employees and employers can exercise a joint option for higher pension contribution, in compliance with the 2022 Supreme Court judgement.
• Online facility to be opened for employees who continued to be a subscriber of EPS on or before 1 September 2014. “Once received, the Regional PF Commissioner shall put up an adequate notice on the notice board and banners for wider public information,” the circular said.
• Those employees who had already contributed higher wages to pension, but not exercised the option formally will now be required to submit an application at the regional office of EPFO.
• Explicit consent of the employee shall be given in a joint option form in case of share requiring adjustment from Provident Fund to Pension Fund, and if any re-deposit to the fund.
• The undertaking of the trustee shall be submitted in case of transfer of funds from exempted provident fund trust to the pension fund of EPFO. “In case of employees of unexempted establishments, refund of requisite employer’s share of contribution, the same shall be deposited with interest at the rate declared under Para 60 of EPF Scheme. 1952, till the date of actual refund,” the circular said, adding that the method of deposit and that of computation of pension will follow through a subsequent circular.

WHAT WAS THE 2022 SUPREME COURT JUDGMENT

On 4 November 2022, the Supreme Court upheld the Employees’ Pension (Amendment) Scheme, 2014, providing those employees who were existing EPS-95 members as on September 1, 2014, to contribute up to 8.33 per cent of their actual salaries, as against 8.33 per cent of the pensionable salary capped at Rs 15,000 a month, towards pension.

The apex court had extended the time to opt for the new scheme by four months exercising its power under Article 142.

“There was uncertainty regarding the validity of the post amendment scheme, which was quashed by the High Courts. Thus, all employees who did not exercise the option but are entitled to do so, but could not due to interpretation of the cut-off date, ought to be given certain adjustments,” the SC had then said.