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.
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
In 1995, the Government introduced a pension scheme under Section 6A of the EPF Act. The Employees Pension Scheme, 1995 (EPS-95) provided that the employer’s contribution of 8.33% should be towards the pension scheme. The EPS-95 capped the maximum monthly pension at Rs.5,000 or Rs.6,000. Thus, employers had to contribute 8.33% of Rs.5,000, which was later raised to Rs.6,500, towards the pension scheme.
In March 1996, a provision was added to para 11(3) of the EPS-95, giving the employer and employee an option to contribute 8.33% of actual salary (above the cap of Rs.5,000 or Rs.6,500) to the EPS. Such a higher salary would be considered a pensionable salary. However, the EPFO gave six months for the employees to file a joint option form for higher pension contributions to the EPS.
The government amended the EPS-95 scheme effective from 01/09/2014. It increased the maximum pensionable salary to Rs.15,000. It also omitted the provision to para 11(3), i.e. exercise of the option by the employer and employee to contribute EPS on a higher salary amount.
Thus, employers would make an EPS contribution of 8.33% on a maximum of Rs.15,000 for the employees joining the EPF scheme after 01/09/2014, even when they draw a higher salary.
However, the employees who were part of EPS-95 or joined before 01/09/2014 could contribute 8.33% to EPS on the actual salary as against the cap of Rs.15,000 if they filed a new joint option with the EPFO within six months, i.e. 28/02/2015.
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.
Higher pension contribution under EPS
| Status of Employee | Exercise of joint option | Eligibility to claim 8.33% pension contribution on a higher salary | Mode of higher pension claim |
| Employees in service as on 01/09/2014 | Exercised joint option and rejected by the EPFO | Yes | By filing a higher pension claim application |
| Employees in service as on 01/09/2014 | Not exercised joint option but contributing to EPS above the cap of Rs.5,000/Rs,6,500 | Yes | By exercising the joint option |
| Employees retired before 01/09/2014 | Exercised joint option and rejected by the EPFO | Yes | By filing a higher pension claim application |
| Employees retired before 01/09/2014 | Not exercised joint option | No | Not applicable |
The Supreme Court provided that employees who were part of the EPF before 01/09/2014 but have not exercised the joint option can exercise it within 03/05/2023. The EPFO further extended the due date to 11/07/2023. For such employees, a higher EPS contribution will be calculated from the date of their joining.
For example:
- Mr. ‘X’ became a member of the EPF in 1998.
- He has not exercised the joint option.
- His salary increased to Rs.50,000 in 2015.
- His employer contributes Rs.6,000 (i.e. 12% of his basic wage) towards EPF.
- Of the employer’s contribution, Rs.1,250 (i.e. 8.33% of Rs.15,000; the statutory wage cap) will go to the EPS.
- The remaining Rs.4,750 (i.e. Rs.6,000 – Rs.1,250) will go to the EPF.
- He exercises the joint option within 11/07/2023 as per the Supreme Court judgement since the EPS contribution is above the statutory wage cap of Rs.6,500.
- After submitting the joint option, his employer will contribute Rs.4,165 (i.e. 8.33% of Rs.50,000; his actual salary) and Rs.1,835 (Rs.6,000 – Rs.4,165) towards EPF.
- The EPFO will calculate the monthly EPS amount of 8.33% of the actual salary and transfer the difference amount from the EPF to the EPS.
In such cases, the EPFO will return to the joining date or 01/11/1995, whichever is later, and transfer the difference from the PF account to the EPS account. But, the higher pension contribution will reduce the EPF lumpsum corpus that the employee gets upon retirement.
How to apply for a higher pension in EPF?
Step 1: Employees need to visit the EPFO Unified Member portal.
Step 2: Click on the ‘Pension on Higher Salary: Online application for validation of Joint Option’ option.
Step 3: Fill in the details and submit the form
The EPFO will digitally register each application and provide the receipt number to the applicant. It will forward the applications to the respective employers, who will verify them through e-sign/digital signature for further processing. The APFC/RPFC-II will examine the case and send the higher pension decision to the applicants via email, post, phone or SMS.
The field officers will examine the application form. If the form is complete, the wage details submitted by the employers will be verified with the the field offices data. Where the field officers data and employers’ details match, the dues will be calculated and an order will be passed by RPFC-II/RPFC-I/APFC for depositing/transferring the dues. The cases where there is a mismatch, it will informed to the employer and the pensioner by the APFC/RPFC-II and one month time will be given to rectify the same.
FAQs
How to track EPFO higher pension application status?
Step 1: Visit the EPFO Unified Member portal.
Step 2: Click on the ‘Track Application Status for Pension on Higher Wages’.
Step 3: On the next page, click on ‘Click Here’ under the ‘Track application status for Pension on Higher Wages’ tab.
Step 4: Select and enter the application acknowledgement number, UAN number or PPO number.
Step 5: Enter the Captcha code, tick the consent and click on the ‘Get OTP’ button.
Step 6: Enter the OTP and click on ‘Get Status’. The application status will be displayed on the screen.
EPF higher pension option form
The eligible employees who retired before 2014 can apply for a higher pension claim with the EPFO. They can apply for the higher pension claim online (as shown below) or with the regional EPF offices.
The eligible employees who joined EPS-95 but are retired/working after 2014 can apply the joint option form online
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