The Employees Provident Fund Organisation (EPFO) has recently come out with a procedure to allow subscribers and their employers to jointly apply for a higher pension under the Employees' Pension Scheme (EPS). This is in compliance with the Supreme Court's November 4 order upholding the 2014 Amendment to EPS.
What has changed?
With the new changes, the subscribers of EPFO are allowed to go beyond the pensionable salary capped at Rs 15,000 per month and contribute more under the EPS. The employers deduct a sum equal to 8.33 per cent of the employee's basic salary towards pension. They also contribute an equal amount to the EPS.
Before the 2014 amendment, the pensionable salary was capped at Rs 6,500 per month.
Now, the employer and the employees will have to jointly request the EPFO to deduct 8.33 per cent from a higher monthly basic salary and they will be able to accumulate more money during their work life towards pension.
How can EPFO subscribers apply for a higher pension?
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In its order, EPFO said that the Joint Option Form will be used for the application for the same. A URL or a digital facility will be notified shortly and the two parties can fill out the form and submit it.
The application will then be digitally logged and a receipt number will be provided to the applicant.
The in-charge of the regional provident fund (PF) office will examine the application and inform the applicant about the decision through email, post, and SMS.
In case of any complaints, the applicants will be allowed to register them on EPFO's grievance portal EPFiGMS.
Further details like the mode of contribution and computation of pension are yet to be announced. EPFO said that these details will be made available in subsequent circulars and the regional PF commissioner shall be responsible to circulate them.
What if I have made a higher contribution already?
If the employees have already contributed towards EPS on a higher wage, they will be required to submit a new application at the regional EPFO office. The employee will also have to provide their consent to make required adjustments from the provident fund to the pension fund and re-deposit the shortfall.
The employees who have made a higher contribution and whose formal joint option was declined can now re-apply under the scheme.