In what could be music to the ears of certain category of Employees Pension Scheme (EPS) members, the Employees Provident Fund Organisation (EPFO) has allowed eligible members to apply for higher pension under the EPS scheme till May 3.
The new extended deadline of May 3 is reflected in the EPFO unified members’ portal activated recently.
The earlier deadline of March 3 had triggered anxiety among membersas many felt it was too short a notice and certain clarity was still missing for them to take a right call on opting for the benefit.
Last week, EPFO came out with a circular that detailed the procedure for subscribers and their employers to jointly apply for higher pension under EPS.
It maybe recalled that the Supreme Court had on November 4 last year allowed four months to apply for a higher pension under EPS. Consequently, the last date to apply for higher pension was set at March 3, 2023, but now extended till May 3.
The window to apply for higher pension was available to only those employees who were members of EPS 95 on or after September 1,2014, but missed the opportunity to apply for higher pension before the expiry of earlier deadline.
Also, only those employees who were contributing to the employees’ provident fund (EPF) in a higher proportion than the previous wage ceilings of ₹5,000 and ₹6,500 but could not opt for the higher contribution can now apply for the higher pension.
Those who want to avail the option of a higher pension will have to make a higher contribution towards EPS 95 from the employer’s share based on their actual wages till the time they remain active members of EPF or retire.
For those opting for a higher pension, a higher contribution from now onward is not enough. They will also have to pay the additional contributions for the previous years.
Not only are eligible employees still weighing the pros and cons before they take a call, but even employers are grappling with this issue as joint applications have to be made to the EPFO for employees to gain the benefit of higher pensions.
Although the EPFO put out a circular last Monday with instructions on how the Supreme Court’s decision of November 4 last year will be implemented at the ground level, the agony has been prolonged for eligible employees as this circular noted that the method of deposit and that of computation of pension will follow through subsequent circular.
The Supreme Court had, on November 4 last year, upheld the amendments made by the Labour Ministry in August 2014 to the EPS 1995.
The amendment restricted the employees’ right to claim a higher pension, their entry into the EPS above a specified salary level, and the calculation of their pension at the time of retirement.
However, the Apex Court had recognised that there had been uncertainty about higher pension in the past and had given time until March 3, 2023 for eligible members to make a joint application with their employer to the EPFO to avail higher pension benefit.
The SC held that there can be no cut-off date for an employer and an employee to avail the option of making higher pension contribution. In case such an option is exercised by the employee, the EPFO can divert the funds from the provident fund scheme to the pension scheme and provide a higher pension to the employees.