India’s retirement fund manager, the Employees Provident Fund Organization (EPFO), has started the process to implement the Supreme Court’s order of November last year, directing the provident fund body to provide an option to eligible subscribers to opt for a higher pension.
The EPFO has asked its field offices to implement the Supreme Court order dated November 4, 2022, through which the top court upheld the validity of Employees Pension (Amendment) Scheme 2014. The retirement pension fund body, which has the world’s largest subscriber base, had asked its field offices to implement the EPS amendment of August 22, 2014.
The amendment raised the pensionable salary cap to Rs 15,000 a month from Rs 6,500 a month, and allowed members along with their employers to contribute 8.33 percent on their actual salaries (if it exceeded the cap) towards the EPS. The Supreme Court in its order has given four more months time to the eligible subscribers to opt for higher pension under EPS-95.
Who can opt for a higher pension under EPS?
The pensioners who as employees had contributed under paragraph 26(6) of EPF Scheme on salary exceeding the prevalent wage ceiling of Rs 5,000/- or Rs 6500/- and those who have also exercised joint option under the proviso to Para 11(3) of the pre-amendment scheme while being members of EPS-95 but their exercise of such option was declined by PF authorities.
The EPFO clarified that the employees who retired before September 1, 2014, without exercising the option under paragraph 11(3) of the pre-amendment scheme are not entitled to the benefits of the Supreme Court’s judgment.
How to opt for a higher pension through the concerned regional office?
In its circular dated December 29, the EPFO clarified that the request will be made in such form and manner as may be specified by the commissioner. Secondly, the application form for validation will contain a disclaimer as ordered in the government notification. Thirdly, in case of shares requiring adjustment from the provident fund to the pension fund, and if there is also any requirement to redeposit to the fund, then explicit consent of the pensioner will have to be given in the application form.
Moreover, in those cases, where the transfer of funds from exempted provident fund trust to the pension fund of the EPFO is to be made, an undertaking of the trustee will have to 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.
In the circular, the EPFO clarified that it would share the details for the method to be used for deposit of such funds in subsequent circulars. The EPFO also laid down certain conditions that an applicant will have to follow if he or she opts for the higher pension and also clarified what documents will be required for evidence and processing of their application.
First, an applicant will have to submit the proof of joint option under Para 26(6) of the EPF scheme duly verified by the employer. Second, the proof of joint option under the proviso to earlier Para 11(3) duly verified by the employer will have to be submitted. Third, the proof of remittance in provident Fund on higher wages exceeding the prevalent wage ceiling of Rs 5000 or Rs 6500 per month will have to be submitted.
Moreover, the applicants will also have to submit the written refusal of the concerned Assistant Provident Fund Commissioner (AFPC) or any other higher authority of the EPFO to such requests.
