The Employees’ Provident Fund Organisation (EPFO) has granted employers a five-month extension until May 31 to upload wage details online for individuals opting for higher pension benefits. The Labour Ministry disclosed that by July 11, 2023, they had received 17.49 lakh applications for validation of option or joint option, while over 3.6 lakh applications are still pending processing by employers.
Initially, the deadline to apply for higher pensions was set for July 11. Subsequently, employers were given a three-month extension until September 30, followed by another extension until December 31. Simultaneously, employees had until July 11 to submit their applications.
The decision to extend the deadline came after numerous representations from Employers & Employers’ Associations requesting more time to upload wage details of applicant pensioners/members. As a result, employers were given an extra three months to submit wage details online by September 30, 2023. This deadline was further extended until December 31, 2023, in response to continued requests for more time.
In a ruling on November 4, 2022, the Supreme Court upheld amendments to the Employees’ Pension (Amendment) Scheme, 2014, allowing existing EPS members as of September 1, 2014, to contribute up to 8.33% of their ‘actual’ salaries towards pension. This amendment adjusted the earlier contribution, which was limited to 8.33% of the pensionable salary capped at Rs 15,000 a month.
In a recent circular, the EPFO specified the pensionable formula for those opting for higher pensions, indicating that the calculation would be as per para 12 of the EPS. The EPFO highlighted that the commencement date of pension would determine the formula applicable for pensionable service, salary, and pension calculations. For individuals retiring in the future, like in 2030, the EPFO clarified that the pension would be calculated based on the EPS provisions existing on the date of pension commencement.
Although the FAQs didn’t explicitly address changes in the pensionable formula, insiders suggested potential adjustments for future retirees under the pensionable formula going forward.
