Only twelve days window left for employees to apply for higher EPS pension. With an aim to provide more clarity on how to claim a higher pension, the Employees’ Provident Fund Organisation (EPFO) on Wednesday released a circular on what all documents one can submit. The retirement fund body has also detailed the method of computing pension on a higher salary.
Formula for calculating higher pension for those who retired prior to 1 September 2014
The pension shall be calculated based on the average monthly pay drawn during the contributory period of service in the span of 12 months preceding the date of exit from the membership of the pension fund.
Formula for calculating higher pension for those who retired/will retire on or after 1 September 2014
The pension shall be calculated based on the average monthly pay drawn during the contributory period of service in the span of 60 months preceding the date of exit from the membership of the pension fund.
Currently, the formula for calculating pension under the EPS scheme is equal to:=(Average salary of 60 months X service period) divided by 70.
In another circular released Wednesday, the EPFO also directed its field officials for verification with a list of documents where proof of joint request/undertaking/permission from the employer is not easily available.
The EPFO circular stated: Whereas a situation has arisen where joint request/ undertaking/ permission under Para 26(6) are not readily available with most of the applicants who have filed Applications for Validation of Option / Joint Options covered under Hon’ble Supreme Court judgment dated 04.11.2022. Accordingly, only in case of applicants otherwise eligible for pension on higher wages as per the directions of the Hon’ble Supreme Court judgment dated 04.11.2022, for scrutiny regarding Para 26(6), the following procedure may be followed:
(i) Field Offices will verify that
a) Employer share of PF contribution has been remitted on employee’s pay exceeding the prevalent statutory wage ceiling of ₹5,000/6,500/15,000 per month from the day the payment exceeded the wage ceiling or 16.11.95 whichever is later, till date/ till the date of retirement or superannuation as the case may be; and
b) Administrative charges payable by the employee have been remitted on such higher wages; and
c) Provident Fund account of the employee has been updated with interest as per Para 60 of EPFS,1952 on the basis of such contribution received; and
d) Any of the following documents have been submitted along with Applications for Validation of Option / Joint Options as proof of joint option and permission under Para 26(6).
• Wage Details submitted by the employer along with Applications for Validation of Option / Joint Options
• Any salary slip/letter from the employer authenticated by the employer
• Copy of joint request and undertaking from the employer
• Letter from PF office issued prior to 04.11.2022 indicating PF contribution on higher wages
Deadline to opt for higher pension from EPF
The last date to apply for a higher EPS pension is June 26, 2023.
What happens if you don’t opt for higher EPS?
Opting for a higher pension will reduce the accumulation in your EPF and increase your pension. However, if you do not opt for a higher pension, you are left with a large EPF corpus.
“For individuals who want to retire early, applying for EPFO’s higher pension may not be a wise idea because EPS pension eligibility is only granted after 10 years of employment and 58 years of age. The person receives a pension from the EPS based on a formula and a lump sum tax-free amount from the EPF account at the time of retirement,” said Amit Gupta, MD, SAG Infotech.
How to apply for a higher pension under EPS on the EPFO portal
-Visit Member e-Sewa portal – https://unifiedportal-mem.epfindia.gov.in/memberinterface/.
-There is an option for “Pension on higher salary: Exercise of joint option “. Click on that
-Select “Application form for joint options – Joint options’
-Enter the required details i.e., UAN, Name, Date of birth, Aadhaar number, Aadhaar linked mobile number, and captcha.
-Click on “Get OTP”
-A one-time password will be sent to your mobile
-Validate your details.
-Click on “Submit” for the final submission of the application.
Upon successfully submitting the application form, an acknowledgment number will be generated.
Meanwhile, EPFO added 13.40 lakh members on a net basis in March, taking the total addition to 1.39 crore in 2022-23, according to payroll data released last month.
Source By: livemint
