Higher EPS pension: After the Employees’ Provident Fund Organisation (EPFO) extended the deadline to apply for higher pension till June 26, the Labour Ministry on Wednesday explained the procedure around the higher pension.
It clarified that it would draw 1.16 per cent additional contribution from within the overall 12 per cent of the contribution of the employers into the provident fund (PF) while computing the pension on higher wages. This is in line with the Supreme Court directive dated November 4, 2022.
In a statement issued on Wednesday night, the ministry said the move will be retrospective in nature.
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“The spirit of the Employees’ Provident Fund & Miscellaneous Provisions Act as well as the Code on Social Security does not envisage contribution from the employees into the pension fund. Accordingly, keeping in mind the letter and spirit of the EPF & MP Act and the Code, it has been decided to draw 1.16 per cent additional contribution from within the overall 12 per cent of the contribution of the employers into the provident fund,” it said.
In its November 2022 order, the Supreme Court had held the requirement of the members to contribute at the rate of 1.16 per cent of their salary to the extent such salary exceeds Rs 15,000 per month as an additional contribution under the amended scheme to be ultra vires of the provisions of the Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952 (EPF & MP Act).
It also directed the authorities to make necessary adjustments to the scheme within a period of six months.
The Labour Ministry its statement said: “For implementing the above direction, all aspects of the matter including legal and administrative were examined in detail. It was decided that since the Code on Social Security 2020 (the Code ) has already been notified, it would be appropriate to bring relevant provisions of the Code into effect,” it said.
The ministry added that the earlier instance when Section 142 of the Code was operationalised as a singular provision.
The Labour Ministry added that certain provisions of the EPF & MP Act will get repealed while giving effect to the relevant provisions of the Code.
The Labour Ministry said that it had promptly taken all actions in line with SC’s November 2022 order within the stipulated deadlines, including extension of deadline to June 26 to allow beneficiaries to file for higher pension.
Higher EPS pension
After extending the deadline to opt for a higher pension, the Labour Minsitry said more than 12 lakh applications have been received to date in this regard.
The ministry said that the timeline has been extended to facilitate and provide ample opportunity to the pensioners/members so as to “ease out any difficulty” being faced by them. “This has been decided after sympathetically considering the various demands received from employees, employers and their associations,” it said.
EPFO has made arrangements for obtaining applications for the validation of option / joint option from pensioners/members as per the Hon’ble Supreme Court order dated November 4, 2022. To facilitate this process, online facility has been made available, it said.
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Here’s how your pension amount will be calculated
If you choose to opt for higher pension, you have to make a higher contribution. The amount will be based based on your actual salary. The pension amount will be average of Basic salary + DA of the last 60 months at the time of retirement and the number of years you served.
