EPFO Higher Pension Scheme: How to Apply for this Scheme Under EPS?

Subscribers to the Employees' Provident Fund who did not opt for a higher pension during an earlier window now have another option. In accordance with the Supreme Court's order of November 4, 2022, the Employees Provident Fund Organisation (EPFO) issued guidelines on Monday for eligible employees to apply for higher pensions under the Employees' Pension Scheme (EPS).
The EPFO has directed its regional offices to carry out the Supreme Court's November 4, 2022 decision upholding the Employees' Pension (Amendment) Scheme, 2014, and has outlined the procedures for applying for a higher pension under the EPS scheme.

The Supreme Court mandated that the deadline for applying for a higher pension under EPS be March 3, 2023. According to the EPFO order, existing employees and EPS members as of September 1, 2014, can claim a higher pension based on actual salary above the prescribed ceiling in the Employees' Pension Scheme (EPS) of 1995.

EPFO had instructed its field officers to allow for a higher contribution option by:

• Employees and employers who contributed on salary in excess of Rs 5,000 or Rs 6,500
• Who did not exercise joint option (by employer and employee) while members of Employees' Pension Scheme (EPS 95);
• Those who were members before September 1, 2014 and remained so on or after that date.

EPFO issued instructions last month to re-examine cases of employees who retired prior to September 2014 and drew higher pensions based on actual wage but did not choose a pension linked to a higher wage through the retirement fund body
That circular stated that in order to stop overpayment, if any, in respect of employees who retired prior to 1st September 2014 without exercising any option under paragraph 11(3) or the pre-amended scheme and have been granted pension on higher wages, their cases must be re-examined to ensure that they are not granted higher pension from January 2023 onwards.

Employees who were members of EPS on September 1, 2014, will be able to contribute up to 8.33% of their actual basic salary to pension, rather than the 8.33% of pensionable salary capped at Rs 15,000 per month. The undertaking must state that the due contribution, plus interest up to the date of payment, will be deposited within the time frame specified by the retirement fund body in a circular. Any employee who was a member of the EPF as of August 31, 2014 and did not elect a higher pension under the EPS has the option to do so on or before March 3, 2023.

How to apply for a higher pension from EPS?

Here's how an eligible employee can easily apply for a higher pension:

• The request will be made in the manner and form specified by the Commissioner.
• The joint option will include the disclaimer and declaration as specified.
• In the case of a share requiring adjustment from the Provident Fund to the Pension Fund, as well as any re-deposit to the fund, the employee's explicit consent will be provided in the joint option form.
• When funds are transferred from an exempted provident fund trust to an EPFO pension fund, the trustee must submit an undertaking. The undertaking must state that the required contribution, plus interest up to the date of payment, will be deposited within the specified time frame.
• In the case of employees of unexempted establishments, the requisite employer's share of contribution shall be deposited with interest at the rate declared under paragraph 60 of the EPF scheme 1952 until the date of actual refund.
• The deposit method and pension computation method will be covered in subsequent circulars.
• The aforementioned joint option must include proof of remittance of the employer's share in provident fund on higher wages than the prevalent wage ceiling of Rs 5000/6500, as well as proof of joint option under Section 26 (6) of the EPF scheme, which must be duly verified by the employer.