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EPFO higher pension guidelines: The Employees’ Provident Fund Organisation (EPFO) has announced a new window for subscribers who couldn’t opt for higher pensions earlier. The EPFO’s new guidelines come just two weeks before the end of the four-month deadline set up by the Supreme Court to enable eligible subscribers to opt for higher pensions under EPS.
The employees now have the option to go for higher contributions towards EPS, which is currently capped at 8.33% of the maximum Rs 15,000 pensionable salary. In the new window, employees will have the option to let their employers deduct a sum equal to 8.33% of the actual basic salary towards the EPS pension.
Employees and employers will have the option to sign up a joint form requesting EPFO to deduct 8.33% of the actual monthly basic salary towards EPS. This will ensure the accumulation of a larger corpus and higher pension for employees.
The Central Government raised the pensionable salary cap under EPS to Rs 15,000 from Rs 6500 through an amendment in 2014. As per the changed rules, employers and members were required to contribute 8.33% of the actual salaries towards the scheme if it exceeded the cap. The EPFO then provided all EPS members with a six-month window to opt for the amended scheme for higher pension. However, several subscribers missed this opportunity. Hence, a new window has been provided based on a Supreme Court judgement in November last.
“…all the employees who did not exercise option but were entitled to do so but could not due to the interpretation on cut-off date by the authorities ought to be given a further chance to exercise their option,” the apex court said in its judgement dated November 4, 2022.
According to the EPFO circular dated 20th February 2023, the following employees along with their employers can submit the joint option to the concerned regional office –
If you are an eligible subscriber, you will be able to exercise the joint option before the regional provident fund office on the joint option form.
It should be noted, however, that more details related to timelines of the application process will be provided by the Regional PF Commissioners soon. All applications will have to be digitally logged, for which a separate URL facility will be provided by the EPFO.
Meanwhile, the EPFO has laid out the following guidelines to be followed:
The EPFO will issue a separate circular detailing the method of deposit and computation of pension.
Currently, employees and employers contribute 12% of the employee’s basic salary and dearness allowance towards EPF. While the employee’s entire contribution goes towards EPF, the employer’s 8.33% contribution goes to EPS and 3.67% to EPF.