The Supreme Court had in November 2022 upheld the Employees Pension (Amendment) Scheme, 2014
The deadline to choose a higher EPFO pension is ending on June 26. The online facility was to remain available only till May 3, 2023, after the Supreme Court earlier in November 2022 asked the government to give subscribers four months for opting for a higher pension.
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The Supreme Court had in November 2022 upheld the Employees Pension (Amendment) Scheme, 2014. The Employees Pension (Amendment) Scheme, 2014, of August 22, 2014, had raised the pensionable salary cap to Rs 15,000 a month from Rs 6,500 a month, and allowed members along with their employers to contribute 8.33 per cent of the actual salaries (if it exceeded the cap) towards the EPS.
The judgment offered a one-time relief to employees who were members of the pension scheme as on September 1, 2014, and had been making a higher contribution i.e., contribution on their actual salary if it was higher than Rs 15,000 per month. These employees are now required to give a joint declaration, along with their employer, to the EPFO in order to continue making contributions on the higher amount.
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The wage ceiling of Rs 6,500 per month as provided in the employees’ pension scheme was revised in 2014 to Rs 15,000 per month, to provide a wide coverage to formal sector employees who were not the part of the scheme earlier and also to help employees after their retirement.
Earlier, there was a lack of clarity about how this additional higher contribution for exercising the option would be worked out and paid.
The members were also not aware whether they would be given the option to withdraw from the higher pension scheme in case the additional payout is exorbitant.
An EPFO circular has clarified that the additional outgo would be worked out by field officers and a cumulative amount along with the interest will be intimated to the subscribers who opt for higher pension.
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It stated that “Pensioners/members may be given up to 3 months to deposit and to give consent for diversion of these dues (in prescribed format).” The field officers will intimate to pensioners or members about the additional dues needed to be paid for opting for a higher pension.
Earlier this month, the labour ministry also clarified that additional contribution of 1.16 per cent of basic wages for subscribers opting for higher pension will be managed from employers’ contributions to social security schemes run by EPFO.
