If you wish to apply for a higher pension, the last date to apply for it under the Employees’ Pension Scheme (EPS) with the Employees Provident Fund Organisation (EPFO) is June 26. However, due to a lack of clarity on some issues, many people are still unsure about applying for the higher EPS option.
Read More: EPFO Simplifies Application Process For Higher Pension Under EPS Scheme
In its November 2022 order, the Supreme Court ruled that employees who were part of the EPF on or before September 1, 2014, but could not apply for a higher pension, can now submit fresh applications within four months which later got extended up to May 3, 2023, and then to June 26. However, the process for submitting a joint application by the employees was extremely complicated earlier, in particular the mandatory requirement of furnishing details of the option under para 26 (6) of the Scheme, 1952. Clause 26(6) allows employees to jointly request with their employer to contribute a higher amount to the fund, exceeding Rs 15,000, to claim a higher pension. The Kerala High Court, while recognising the enabling nature of Clause 26(6) and the proximity of the cut-off date, directed the EPFO to make provisions in the online facility to furnish options without the production of the document under Clause 26(6).
In this piece, we look at what experts have to say about higher EPS pensions and their view on extending the deadline.
Read More: How to grow your PF money to meet your retirement goal
Aarti Raote, Partner, Deloitte India, says, “The government has issued a notification dated May 3 which states that for members exercising the option for contributing toward an additional pension, the employer contribution would be 9.49% (8.33% + 1.16%) of the PF wages. This increased contribution would apply only for the contributions above the PF threshold of Rs 15,000.”
However, Sanket Jain, Partner, Pioneer Legal, says, “Since the EPFO department has considerably delayed the clarifications on the application process and computation of higher pension, with the most recent circular issued on June 14, the department will have to extend the last date for submission (June 26). In fact, the department may have to accept applications post the deadline in cases where sufficient reasons for delay are provided.”
Echoing similar views, Vaibhav Bhardwaj, Partner, INDUSLAW, says, “There appears to be a prevalent ambiguity regarding the additional 1.16% pension contribution that is required to be made. Of course, while the original amendment to the EPS Scheme had imposed this requirement of paying additional contributions on the pensioners, the Government later required the employers via a notification dated May 3. However, it remains to be seen as to whether this additional contribution requirement of 1.16% would result in an increase in the overall contribution percentage required by an employer, as the EPFO has issued no clarification in this regard. In addition to this, the EPFO continues to issue fresh circulars, which have an impact on the application process. For instance, a recent circular issued by the EPFO provides an alternative verification mechanism for pensioners who could not submit proof of joint option under the EPF Scheme, which may require additional time for implementation. In light of these manifold issues, further extension of the deadline by the EPFO can be expected.
Read More: EPFO UAN Activate: Here’s How Can An Employee Self-Generate UAN Number
Adding to it, Kriti Kaushik, Partner, Shardul Amarchand Mangaldas & Co. says, “While the EPFO has issued multiple circulars over the course of time to provide clarity on the application process for availing the higher pension option, there are still several aspects that remain unanswered. The timing of these circulars has mostly been at the eleventh hour which has led to a lot of uncertainty amongst the pensioners and employers in terms of implementation. Even though the EPFO has clarified that the additional contribution of 1.16% would come from the employer’s share, there is still no clarity on sourcing of these contributions where the employer has already wound-up business. Further, there are also cases where the relevant data is either not available with the last employer or is not traceable due to the business having transferred or merged with other entities. Given these issues, one can reasonably expect a possible extension in the timeline of June 26, 2023.
Since the EPFO has already extended the deadline twice, the chances to extend it further are slim.
