EPF

EPFO New Guidelines for Higher Pensions

calendar28 Feb, 2023
timeReading Time: 7 Minutes
EPFO New Guidelines for Higher Pensions

The Employees Provident Fund Organization, or the EPFO, came out with new guidelines on 20 February 2023 for employees with respect to higher pensions. The new guidelines provide for the employers and subscribers to jointly apply for higher pensions under the EPS or the Employees’ Pension Scheme. EPFO has now allowed the subscribers to go beyond the current cap by opting for 8.33% of the maximum of ₹15,000 per month of pensionable salary.  Under the new guidelines, the employees will have the option to allow their employers to deduct an amount that is equal to 8.33% of the actual basic salary for the EPS pension.

Reason for the EPFO guidelines

The Central Government had earlier increased the pensionable salary cap was increased from ₹6500 to ₹15,000 per month by the EPS amendment of 2014. According to the changed rules, members and employers were required to contribute 8.33% of the actual salary towards the scheme in cases where the salary was more than the cap. EPS members were provided with a six-month window by the EPFO to opt for the new scheme for higher pension. However, many subscribers missed this particular opportunity. To remedy this, the Supreme Court, in the case of The Employees Provident Fund Organization and another versus Sunil Kumar and others in November 2022, where the validity of the employees’ pension amendments scheme of 2014 was upheld. It held that all the employees who were eligible but did not exercise the option to opt for the amended scheme due to the interpretation of the cut-off date by the authorities must be given another chance to exercise this option through EPFO Registration online. The Supreme Court also provided that members who are registered before 1 September 2014 and haven’t yet retired shall be provided an additional period of 4 months to opt for a higher pension through a joint option form. The new EPFO guidelines of February 2023 were released in pursuance of the Supreme Court judgment.

Supreme Court also mandated that the applications for EPFO registration online under the new guidelines were required to be filed online within four months from the date from when the ruling was passed, that is either on or before 3 March 2023. It is expected that the EPFO shall issue further guidelines regarding the following aspects pertaining to the online EFPO registration online to avail higher pensions:

  • Manner and form of request to be made by the employee.
  • Manner of reallocation or deposit of funds from the Provident Fund scheme into the pension scheme along with the interest till the refund date.
  • Computation of pension for such employees.

EFPO Guidelines for EPFO Registration Online in India

The EPFO laid out the below mentioned guidelines regarding EPFO Registration Online:

  • The request to opt for a higher pension shall mention that the form and manner shall be decided by the Regional Provident Fund Commissioner[1].
  • The joint option shall contain a declaration and a disclaimer as may be provided for. In case of share requiring adjustments from the Provident fund into the pension fund Kama and if any repeat deposit has to be made to the fund, the joint option form shall have the explicit consent of the employee.
  • In case funds have to be transmitted from exempted Provident fund trust into EDPO’s pension fund, an undertaking from the trustees shall be required to be submitted. The undertaking shall be that the new contribution, with the interest till the date of payment, shall be deposited within the specified.
  • In case of an employee from any of the exempted establishments, the refund of the share of contribution by the employer shall be deposited along with interest add the rates as is declared under the EPF scheme of 1952 up to the date of the actual refund.
  • Of the joint option is required to provide a proof of remittance the share of the employer in the Provident fund on higher wages that exceed existing weight ceiling of ₹6500 or ₹5000 along with a proof of the joint option as provided under Para 26 of the EPF scheme. This shall be duly verified by the employer.
  • The application shall go into the account of the employer, where the digital signature or e sign of the employer shall be required for further processing.

Eligibility for EPFO Registration Online to opt for Higher Pensions

The EPFO circular with new guidelines with respect to EPFO registration online to opt for higher pensions provides for the eligibility criteria to apply for higher pensions. Only those employees that qualify for the below mentioned shall be eligible to submit an application to opt for a higher pension:

  • As given in the circular, only those employees who were, before 1 September 2014, members of the Employees Provident Fund, and
  • Contributed to be a member of the Provident Fund Scheme on the salary exceeding ₹6500 or ₹5000, either on or after 1 September 2014, and
  • Did not opt for a higher pension under the EPS 95 scheme.

Procedure for EPFO Registration Online to opt for Higher Pensions

Employees interested in opting for higher pensions through EPFO registration online, shall have to file a joint form with the employer for availing the added benefits in the form as prescribed by the EPFO commissioner along with the requisite documents. The below mentioned steps have to be followed to file the joint form and opt for higher pensions:

  • The applicant is required to visit the official website of the employees Provident fund organization.
  • Once the website is open, the applicant shall be presented with the “pension on higher salary- online application of joint option” flash link. The applicant is required to click on the link.
  • The applicant shall be taken to the next page, which shall have an option for “application form validation of joint option under erstwhile Para (11) (3) and Para (11) (4) of EPS 95”. The applicant is required to click the option.
  • The applicant is then required to click on “validation of joint option for the employees four members before 1 September 2014 and continue to be members on or after 1 September 2014.”
  • The applicant then shall enter details like PPO number, if the applicable name, date of birth, aadhaar number of the applicant, and aadhaar linked mobile number. The applicants are also required to fill in the capture and check on the declaration box.
  • The application form shall be displayed. The disclaimer shall state that the applicant has gone through the Supreme Court judgement dated 11 November 2022 Andrew registering the application in accordance with the directions contained in the judgment. The employee undertakes that the pension shall be calculated subject to the form and manner determined under EPS scheme.
  • The applicant is then required to provide details of the member, like email address, mobile number, and then attach joint option along with an undertaking by the trust in case the employee is from an exempted establishment.
  • The applicant is then required to file in the contribution details. This shall include the following:
    • Details regarding whether the member wants to use the accumulation that is available in her Provident Fund Account for payment of a contribution for this particular option.
    • This shall also include details regarding whether the member shall be given the undertaking to deposit a contribution along with an interest which will be due till the date of payment by the last employer. This is only when the Provident fund account has an insufficient balance.
    • They will also be required to attach documentary evidence as is provided under Para (6) (vii) of the circular, namely, proof of remittance of the share of the employer to the provident fund on higher wages exceeding the existing wage ceiling of ₹6500 ₹5000 along with proof of joint option under Para (26) 6 of the EPF scheme which has been verified by the employer.

What Happens after the Application Form is submitted?

The application form, for EPFO registration online under the new guidelines, when submitted under the time that is specified in the joint option form shall be dealt with in the below mentioned manner by the regional Provident fund commissioner:

  • The facility shall be provided for which the URL shall be provided shortly. Once the application has been received, the Regional Provident Fund Commissioner is required to put up adequate notice and banners for the broader publication of information to the public.
  • Each application is required to be registered and digitally launched. The receipt number shall be provided and sent to the applicant.
  • The application shall land into the account of the employer news e sign out digital signature will be essential for verification for further processing.
  • The regional Provident Fund Commissioner shall cause the application to be converted into an e file as far as possible.
  • The dealing assistant shall examine the documents along with the receipt of the due amount in the pension fund and send the case to the accounts officer or a supervisor.
  • The concerned account officer or supervisor shall mark out any discrepancies and send it after duly assessing it to the assistant Provident fund commissioner or the regional Provident fund commissioner-II, who shall decide the case.
  • The particular assistant Provident fund commissioner, the Regional Provident Fund Commissioner-II, will examine each case of the joint option on a higher salary. Any decision received must be intimated through email or post to the applicant. Clear efforts shall also be made to inform the applicant either through telephone or SMS.

Conclusion

The Employees Provident Fund Organization, or the EPFO, came out with new guidelines for EPFO registration online on 20 February 2023 for employees with respect to higher pensions. The EPFO guidelines of February 2023 were released in pursuance of the Supreme Court judgement of November 2022, where the validity of the Employees’ Pension amendments scheme of 2014 was upheld. It held that all the employees who were eligible but did not exercise the option to opt for the amended scheme due to the interpretation of the cut-off date by the authorities must be given another chance to exercise this option by filling the form for EPFO registration online to opt for higher pensions. The new guidelines provide for the employers and members to jointly apply for higher pensions under the EPS. EPFO has also allowed the members subscribed to the provident fund to go beyond the current cap by opting for 8.33% of the maximum of ₹15,000 per month of pensionable salary. The employees now have the option to allow their employers to deduct an amount that is equal to 8.33% of the actual basic salary for the EPS pension. Employers and employees shall have the option to opt for a joint form requesting EPFO to deduct 8.33% from the current monthly salary towards the EPS. This shall allow for higher pensions for employees due to the accumulation of a large corpus. The deadline to apply for higher pensions, as mentioned above, is 3 March 2023.

Also Read:
How To Apply For EPF Registration Online?
How To Obtain GST Registration In India?

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