Top EPFO Pension Plan: When it comes to personal financial planning, there are limited options available for retirement. However, Employees Provident Fund Organization (EPFO) offers a solution for retirement planning with EPS plan. Recently, the organization has decided to offer a higher pension plan under the EPS.
The last filing date was May 3, 2023 and has now been extended to June 26, 2023. Here’s everything you need to know about eligibility, benefits, and how you can apply.
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-EPFO (@socialepfo)
May 17, 2023
What is EPS?
EPS stands for Employees Pension Scheme and is a retirement savings scheme introduced by the Government of India for employees working in the organized sector.
Under this plan, both employees and employers make contributions to the employee’s retirement savings.
According to EPFO “An employee will cease to be a member of the Pension Fund from the date on which he or she turns 58 years of age or from the date on which he or she acquires eligible benefits under the Plan.”
The EPS was introduced in 1951. The organization claims “The Employees’ Provident Fund came into existence with the promulgation of the Employees’ Provident Funds Ordinance on November 15, 1951. It was replaced by the Employees’ Provident Funds Act, 1952.”
What is the higher pension scheme?
The EPFO has recently announced the changes in the EPS Higher Pension Scheme.
The EPFO web circular states “(i) In respect of members who have exercised the joint option to contribute in accordance with the provisions of paragraph 11 of the 1995 Employee Pension Plan and who are considered eligible, the employer’s contribution will be nine forty-nine percent . (9.49%) of the base salary, dearness allowance and retention allowance of each member for
increasing one and sixteen percent. (1.16%) of the existing eight and one-third percent. (8.33%);
“And (ii) the increased contribution shall be applicable to basic wages, dearness allowance and retention allowance to the extent such basic wages, dearness allowance and retention allowance exceed fifteen thousand rupees per month” .
As per this circular, the EPFO will take the additional contribution of 1.16% from the employer’s share of the EPF contribution. This means that employees will continue to receive a higher pension.
However, the allocation of funds to the Employees Provident Fund (EPF) and the Employees Pension Scheme (EPS) will be changed. This will result in a reduction in the EPF corpus and an increase in the EPS balance.
Who is eligible for a higher pension plan?
According to the Supreme Court order, an employee is entitled to a higher pension plan if:
- The employee retired on September 1, 2014 and was making higher contributions to his EPF account. However, the EPFO rejected his request for higher contributions.
- The worker was affiliated with the EPS or EPF on September 1, 2014 and continued to be affiliated with the scheme after his retirement.
Here is the circular that says: “44 (iii) Employees who had exercised the option under the provision of paragraph 11(3) of the 1995 plan and were still in service on September 1, 2014, shall be guided by the amended provisions of paragraph 11(4) of the the pension system.
“44(iv) Those affiliated with the scheme, who did not exercise the option, as contemplated in the provision of paragraph 11(3) of the pension scheme (as it was before 2014 Amendment) would be entitled to exercise the option under paragraph 11(4) of the position amendment scheme.
“His right to exercise the option before September 1, 2014 is crystallized in the judgment of this Court in the RC Gupta case (supra).
“The plan as it stood before September 1, 2014 did not provide for any deadline and therefore, those members will be entitled to exercise the option in terms of paragraph 11(4) of the scheme, as it currently stands.
“Your option exercise will be in the nature of joint options covering previously amended paragraph 11(3) as well as amended paragraph 11(4) of the pension scheme.
“There was uncertainty regarding the validity of the post-amendment scheme, which was set aside by the aforementioned judgments of the three High Courts.
“Therefore, all employees who did not exercise the option but were entitled to do so but were unable to do so due to the interpretation of the deadline by the authorities, should be given a new opportunity to exercise their option.
“In these circumstances, the period for exercising the option under paragraph 11(4) of the scheme will be extended for a further period of four months. We are giving this direction in exercise of our jurisdiction under Article 142 of the Constitution of India. Rest of requirements in accordance with the modified provision.”
Furthermore, EPFO has mentioned that “The Field Office will examine each case and classify it into the following categories:
- The calculated fees have already been fully remitted to the EPS in the months due.
- The assessed contributions have not been remitted to the EPS, but the contributions on higher salaries have been remitted in full to the EPF and there is an adequate balance in the PF account.
- The calculated contributions have not been remitted to the EPS, but the contributions on higher salaries have been remitted in their entirety to the EPF and there is an inadequate balance in the PF account or the PF account is in the hands of establishments exempt from the PF” .
How to request a higher pension plan?
Eligible employees can apply for higher pension claims through the online portal by following the steps listed below or by visiting EPF regional offices.
- The EPFO has offered an option to apply for the scheme online through its EPFO Portal.
- After visiting the site, users need to click on the “Higher Salary Pension” option.
- Then the user needs to fill the details and submit the form.
- After submission, the website will record the information and provide a receipt to the requester.
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Source: epr.edu.vn