EPFO subscribers can opt for higher pension now; can ask for 8.33% deduction from total PF contribution

After days of discussions, the Employees’ Provident Fund Organisation (EPFO) has issued a circular on Monday to its regional offices with a set of instructions to implement the November 4 judgment of the Supreme Court on higher provident fund (PF) pension. It lists the procedures and required documents for existing employees and for those who retired after September 1, 2014 to claim higher pension based on actual salary beyond the prescribed ceiling in the Employees’ Pension Scheme (EPS) of 1995.

Employees can submit the joint option with the employers using the members’ section of the EPFO website, which will be made available “soon.” While employers’ organisations welcomed the circular, trade unions said it was delayed beyond the date suggested by the Supreme Court and it will cause further inconvenience for pensioners as the deadline set by the Supreme Court to submit joint options will end on March 3.

Regional PF Commissioner (Pension) Aprajita Jaggi said in the circular that employees who did not exercise joint option as per paragraph 11(3) of the EPS “would be entitled to exercise joint option”. The employees and pensioners who had contributed to the EPS and did not exercise joint option for higher pension on actual salary prior to September 1, 2014 can now apply for enhanced pension. The employees and pensioners should give joint consent with the employer to the EPFO for adjustment from Provident Fund to Pension Fund and for any re-deposit to the fund. “In case of transfer of funds from exempted provident fund trust to pension fund of EPFO, an undertaking of the trustee shall be submitted. The undertaking shall be to the effect that due contribution along with interest up to the date of payment, will be deposited within the specified period,” Ms. Jaggi added in the circular.

“In case of employees of un-exempted establishments, refund of requisite employer’s share of contribution, the same shall be deposited with interest at the rate declared under Para 60 of the EPF Scheme, 1952, till the date of actual refund,” the circular said and added that the method of deposit and that of computation of pension will follow through subsequent circular.

Member of the Central Board of Trustees representing employers K.E. Raghunathan said the circular had simplified the process with clarity for seeking pension on higher wages. “This has put at rest all the other speculative expectations. We must appreciate the complexity and financial implications,” he said.

A.K. Padmanabhan, member representing workers in CBT, said the EPFO had already done injustice to the employees by delaying the circular for joint options and giving notices to a number of pensioners to recover their higher pension. “The January 25 circular should be corrected. The date for submission of the joint option is not yet there in the new circular. There is only few days before March 3, the deadline set by the Supreme Court. In 10 days, pensioners and employees are supposed to submit a number of documents. The EPFO should have started the process before December 29. The EPFO is taking all decisions unilaterally. The CBT meeting should be called immediately,” he added.

S. Krishna Moorthy, an advocate fighting for pensioners’ rights, said the conditions laid down by the EPFO for exercising higher pension were not among the observations of the Supreme Court. “These conditions are probably incorporated with an ulterior motive to defeat the claim of majority of the pensioners waiting for the window to open,” he said.

The Employees’ Provident Fund Organisation’s (EPFO) February 20, 2023 circular, laying down the broad contours of eligibility for those members of the Employees’ Pension Scheme (EPS) who were in service as on September 1, 2014 for seeking higher pension, has raised further concerns from activists.

A.S.R. Namazi, former Chief Law Officer of the Karnataka State Road Transport Corporation (KSRTC) and now the general secretary of KSRTC Retired Officers and Supervisors Association, Hubballi, says given the fact that the period of four months, as stipulated by the Supreme Court in its judgment of November 2022, is expiring on March 3, very limited time is left for willing members of the EPS to exercise the option. Again, the circular by itself would not enable them to give their option, as they have to wait for one more circular of the EPFO and the respective Regional PF Commissioner’s communication on the form and manner of the request for exercising the option. “At least, another two or three days may be taken by the authorities for follow up,” Mr. Namazi says.

M. Somasundaram, a Chennai-based consumer activist, says the circular lacks clarity as no illustration has been given with regard to an estimated amount of pension that a member of the EPS would get. “When a willing member exercises his or her option along with his or her employer, he or she gives the consent for transfer of a certain amount of money from his Provident Fund account to the general Pension Fund. In the absence of required information, such a member would not like to exercise the option,” Mr. Somasundaram points out, expressing the hope that the authorities will clear the air as early as possible.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top