The Employees’ Provident Fund Organisation (EPFO) recently issued an updated set of Frequently Asked Questions (FAQs) on the implementation of higher pensions following the Supreme Court ruling in November 2022.
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The process for employees opting for higher pensions concluded on July 11, 2023, but the deadline for employers was extended to December 31, 2023.
Documentation
The revised FAQs offer clarity on various aspects, including the documentation required from both employees and employers and the process for making a joint request for higher pensions.
It highlights that a higher pension application will not be rejected if the employee has not obtained the necessary permission.
The Regional Provident Fund Commissioner is mandated to gather details from the employer to confirm that contributions were made based on a higher salary, making the employee eligible for a higher pension.
In the case of filing an online application for joint option validation, if documentary proofs are not submitted, the Regional Provident Fund Commissioner cannot reject the application solely for lack of documents.
Instead, the necessary documents will be obtained from the employer to ascertain contributions for a higher pension and eligibility.
Read More: EPFO Issues Updated FAQs Post Supreme Court Verdict On Provident Fund Pension – Details
Calculation of pensionable salary
The computation of the pensionable salary depends on the pension commencement date. For pensions commencing before September 1, 2014, it will be based on the 12 months’ average salary during the contributory 12 months preceding the exit date from the pension fund.
For pensions commencing on or after September 1, 2014, the pensionable salary will be calculated based on the average monthly pay during 60 months of contributory service preceding the date of exit from the scheme.
Regarding retirement in the future, the FAQs state that the pension will be calculated based on the provisions existing at the time of the pension commencement date.
What about arrears?
Arrears of pension, if any, will be paid to pensioners following the existing process to comply with income tax provisions related to TDS, as per the EPFO’s updated FAQ.
The updated FAQ comes as the deadline for employers’ formalities ends on December 31, 2023, and provides essential guidance for individuals navigating the process of opting for higher pensions under EPS’95.
