EPFO higher pension link online 2023: There are some reasons why you should avoid opting for higher pension contributions.
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The EPFO higher pension online link will be available soon. The online higher pension link will allow subscribers, who were part of EPF before 1st September 2014, to exercise the higher pension option by applying jointly with their employers. The Employees’ Provident Fund Organisation (EPFO) has said on its website that the online higher pension link will be available soon.
Earlier in a circular dated February 20, the EPFO had said that a facility for filing joint option will be provided for which a URL will be informed shortly.
As there are less than 10 days left before the end of the four-month window set by the Supreme Court to enable eligible subscribers to opt for higher pension under EPS, it is expected that the EPFO will make the link online in the next 2-3 days.
Why you should avoid EPFO higher pension?
As per the Supreme Court ruling, employees, who were a member of the Employees Pension Scheme (EPS) as on 1 September 2014, can opt for higher pension contributions based on their actual wages instead of the statutory wage ceiling of Rs 15,000.
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EPFO’s February 20 guidelines said that eligible employees who had earlier not opted for higher pension contributions under EPS can now do so. However, the following are some reasons why you may want to avoid opting for the higher pension contribution.
1. The biggest drawback of opting for the higher pension is that a portion of your EPF corpus will be reallocated to the EPS scheme from the date of joining to enable a higher pension. The transfer of EPF money to EPS will reduce the benefit of compounding you may have earned over the years by being an EPF member. Therefore, before going for the higher pension option you should do a proper assessment.
2. All the money in the PF account belongs to you. If you die, the full amount is given to your nominee/legal heirs. But under EPS, only 50% of the pension will be provided to the spouse in case of death. There is no lump sum payment in EPS. Therefore, you should consider your life expectancy before going for a higher pension.
3. EPS doesn’t provide any lump sum payment. It gives you a pension based on your accumulated corpus. Instead of opting higher pension under EPS, you may consider other Government-backed options like NPS that will provide market-linked returns plus a lump sum for buying an annuity on retirement. Moreover, NPS contribution also provides an extra Rs 50,000 deduction above the Rs 1.5 lakh deduction available under Section 80C.
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4. EPS scheme lacks flexibility. Also, the interest earned by EPS amount is not the same as EPF, which is generally higher.
5. For those planning to retire early, opting for EPFO’s higher pension may not be good as a person becomes eligible for pension under EPS only after completing 10 years of service and 58 years of age.
