Subscribers of the Employees’ Provident Fund Organisation (EPFO), who hadn’t opted for higher pension under a previous window, will now have the facility to exercise the option. Complying with a November 2022 Supreme Court order that upheld Employees Pension (Amendment) Scheme 2014, the EPFO on Monday came out with the procedure for such subscribers to apply for the higher pension.
“Employees and employers who had contributed on salary exceeding the prevalent wage ceiling of Rs 5,000 or Rs 6,500 per month and did not exercise the joint option and were members before September 1, 2014 and continued to be members would be able to use the joint option for higher pension,” the EPFO said.
In its ruling on November 4, 2022, the Supreme Court had upheld the 2014 Scheme, giving another opportunity to subscribers to opt for the higher pension payout. Employees who were existing Employees’ Pension Scheme (EPS) members as on September 1, 2014 can contribute up to 8.33% of their ‘actual’ salaries — as against 8.33% of the capped salary — towards pension.
Eligible subscribers would now be able to apply to the regional provident fund office on the joint option form for which a facility will be provided with a URL (unique resource location) soon. The form would have to include proof of the remittance of employer’s share in provident fund on higher wages than the then prevalent monthly wage ceiling of Rs 5,000 or Rs 6,500, the EPFO said.
“In case of share requiring adjustment from Provident Fund to Pension Fund, and if any redeposit to the fund, explicit consent of the employer will be given in the joint option form,” it further said. In case of transfer of funds from exempted PF trust to pension fund of EPFO, an undertaking to the trustee will be submitted on the due contribution and interest upto the period. In case of employees of unexempted establishments, any refund of employer’s share of contribution will be deposited with interest upto the period of refund.
The EPFO will declare the method of deposit and of computation of pension through a subsequent circular. Applications for joint option will be registered digitally and will have to be verified by the employer’s digital signature for further processing.
The concerned additional or regional PF commissioner will examine each case of joint option and communicate the decision to the applicant at the earliest. To ensure strict implementation of the decision, the officer in charge of the regional PF office will send a weekly monitoring report to the zonal office, which will then be submitted to the EPFO headquarters.
Also Read: How to get higher pension from EPFO: New guidelines explained
The EPFO guidelines come just a fortnight ahead of the four-month deadline set by the Supreme Court to enable eligible subscribers to opt for the higher pension under the EPS. A number of companies had, by Monday evening, begun informing their employees of the EPFO circular and the procedure to exercise joint option for higher pension.
KE Raghunathan, member, Central Board of Trustees, representing employers, welcomed the circular and said, “EPFO has come out with a very clear statement fulfiling the Supreme Court verdict and the needs of the members.
It is not an easy situation as it needs careful analysis and clarity. The EPFO, at the end of the process, has come out with a happy ending for all stakeholders, especially senior citizens, despite the complexity and financial burden involved.”
Previously on December 29, the EPFO had started implementing the Supreme Court ruling and had said that subscribers who had contributed to the EPS on higher salaries than the wage cap and had jointly applied but whose request was declined could now apply digitally or online for the same.
Through an amendment in 2014, the government had hiked the pensionable salary under the EPS to a maximum Rs 15,000 per month from the earlier Rs 6,500 cap. Employers and members had to contribute 8.33% of the actual salaries towards the scheme, if it exceeded the cap. All EPS members, as on September 1, 2014 were given a six-month window to opt for the amended scheme.
Further, employees were required to contribute at the rate of 1.16% of the monthly salary exceeding Rs 15,000 towards the pension fund.