Higher pension: The deadline for employers to process and upload wage details of applicant members under the higher EPS Pension Scheme has been extended by the EPFO to January 31, 2025. Despite multiple extensions, there are over 3.1 lakh pending applications for validation of options or joint options with employers. The EPFO has received numerous requests from employers and employers’ associations to further extend the time period for uploading wage details of applicant pensioners.
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The implementation of increased pension benefits began following a Supreme Court ruling permitting EPS members, particularly those in the sector of employees, to seek a higher payout. Unfortunately, the process of obtaining the enhanced EPS pension has proven challenging for many applicants. Numerous employees who have submitted joint pension applications under the Employees’ Pension Scheme (EPS) are facing obstacles, with their requests either being denied or left pending approval by their former employer(s).
According to the latest notification from the Employees Provident Fund Organisation (EPFO), employers must furnish the necessary clarifications requested by EPFO before January 15, 2025, in order to facilitate the processing of the higher pension application.
Higher pension scheme
An individual who was a member of the EPF on or before August 31, 2014, or had retired by that date, has the option to receive an enhanced pension under the Employees’ Pension Scheme (EPS) based on their actual wage (basic salary) rather than the prescribed limit (Rs 6,500/Rs 15,000).
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By choosing to contribute based on higher wages, the individual becomes eligible to receive a pension calculated on the average of their actual last drawn wages (basic salary) instead of the capped amount (currently Rs 15,000) at the time of retirement.
Eligibility for Higher pension scheme
EPFO members with at least 10 years of service may apply for an increased pension under the EPS 95 scheme. To qualify for a regular pension, members must be a minimum of 58 years old. However, EPF subscribers have the option to choose an early pension if they reach at least 50 years of age.
The monthly pension amount is calculated as the pensionable salary multiplied by the pensionable service, divided by 70, on a pro rata basis linked to the maximum monthly pensionable salary. This maximum pensionable salary is Rs 6,500 for pensionable service up to September 1, 2014, and Rs 15,000 thereafter.
What can be done if the application is rejected?
If your pension application is rejected or not approved by old employer, one can take these steps:
> It is the responsibility of the employee to monitor whether their application has been rejected by both their previous and current employers. EPF members should regularly review alerts from EPFO and respond accordingly, as this may prompt a reconsideration of their application for processing.
> EPFO has established safeguards to address the rejection of pension applications. Employers must provide justification for rejecting applications for increased pension benefits.
> If the employer wrongly rejects the application, the employee should address the issue with the appropriate regional office. Alternatively, employees and pensioners can utilize the EPFiGMS portal to file their complaints.
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Vaibhav Bhardwaj, Partner at Khaitan & Co, told the Economic Times: “Such a rejection will be intimated to the applicant concerned. An employee whose pension application is rejected will get a chance to make the required corrections in the application or provide additional documents, as the case may be, within 1 month of issuance of the rejection letter. The action that an employee needs to take depends on the reason for rejection, if any.”
What if employers are delaying your application process
Some employers may still need to process their employees’ higher pension applications. It is mandatory for all employers to review and approve these applications to ensure that employees are eligible for a higher pension.
Employees should monitor the status of their application on the EPFO’s member Sewa portal. If the application is not yet processed, they should contact their employer to inquire about the delay and request prompt action. Employees also have the option to raise a grievance on the EPFiGMS portal if necessary.
Approval from all employers is necessary before proceeding with the application for a higher pension. If this approval is not obtained, EPFO may not be able to process the application. If members encounter any issues preventing them from submitting an online application, they can raise a grievance on the EPFiGMS portal, specifying the reason for the delay.
In certain legitimate situations, such as when an old employer no longer exists due to amalgamation or merger, the current employer may be required to provide the necessary wage details for EPFO to process the higher pension application.
