The Supreme Court ruling on ‘Pension on Higher Wages’ is yet to fructify after being rolled out in November 2022. Pensioners and members of the Employees’ Provident Fund Organisation who had opted for ‘Pension on Higher Wages’ are waiting to hear from the EPFO.
In January 2024, after previously extending the deadline for employers to upload wage details and other information for Pension on Higher Wages, the EPFO extended the deadline for employers from December 31, 2023, to May 31, 2024.
Since then, there has been no information on any extension of the deadline, nor on the status of pensioners’ and members’ contributions from the EPFO. The pensioners and members who had applied for ‘Pension on Higher Wages’ are waiting to hear from the EPFO.
A mail sent to EPFO remains unanswered at the time of filing this story.
In a written reply in the Lok Sabha on 05 FEB 2024, Union Minister of State for Labour and Employment Shri Rameshwar Teli had stated that as per the valuation of the Employees’ Pension Fund, 1995, as on 31.03.2019, there is an actuarial deficit in the EPS 95 scheme.
What is ‘Pension on Higher Wages’ Issue All About
The EPS 95 Scheme was amended on September 1, 2014, by changing the cap on monthly salary to Rs 15,000 from the earlier Rs 6,500. Members and employers were required to contribute 8.33% of their actual salary, even if it exceeded the EPS ceiling, and were given six months to choose the modified scheme. Employees who opted for the amended scheme were required to contribute 1.16% of their monthly salary exceeding Rs 15,000 towards the pension fund.
However, many retired members and existing provident fund members of EPFO missed out on this member-friendly amendment and went to court. The Supreme Court upheld the 2014 amendments, allowing subscribers to opt for higher pensions, but striking down the member contribution of 1.16%. The court also extended four more months to eligible subscribers.
Last Date for Pensioners/Members
An online facility was made available by EPFO for submitting Applications for Validation of Option /Joint Options for pension on higher wages. The facility was for eligible pensioners / members in compliance with the Supreme Court order dated 04.11.2022.
The facility was launched on 26.02.2023 and was to remain available only till 03.05.2023. However, considering the representations of the employees, the time limit was extended to 26.06.2023 in order to provide complete four months’ time to eligible pensioners / members for filing applications.
A last opportunity of 15 days was further given to remove any difficulty faced by the eligible pensioners/ members. Accordingly, the last date for submission of Applications for Validation of Option / Joint Options by employees was extended to 11.07.2023.
17.49 lakh Applications for Validation of Option / Joint Options have been received from pensioners / members till 11.07.2023.
Last Date for Employers
The employers were also given further period of three months to submit wage details etc. online latest by 30.09.2023. This time was further extended till 31.12.2023 because many representations were received from Employers & Employers’ Associations wherein requests were made to extend further time period for uploading wage details of applicant pensioners / members.
As of January 3, 2024, more than 3.6 lakh Applications for Validation of Option / Joint Options were still pending with the employers for processing.
Therefore, in order to ensure that employers process these remaining Applications for Validation of Option / Joint Options, the Chairman, CBT EPF had approved the proposal to grant another extension of time for the employers for uploading wage details online etc till 31st May, 2024.
Status of Applications
The exact amount to be paid by the pensioner or member was communicated by the concerned office in the Demand Notice after verifying the application and wage details of eligible applicants. In case you have applied and if your employer has acted on the application, an opportunity will be given for any clarification or corrections.