Deadline for Opting for Higher Pension Extended to June 26: FAQs
The Employees’ Provident Fund Organisation (EPFO) has extended the deadline for choosing the higher pension option to June 26. This option allows eligible members to receive a higher pension based on their actual salary rather than the statutory wage ceiling. If you’re considering this option, here are some key points to keep in mind. What does the higher pension option mean? Currently, the EPF contribution is calculated based on the basic salary, and a portion goes towards the employees’ pension scheme (EPS). The amount directed to EPS is calculated on the statutory wage ceiling of Rs 15,000. However, after a Supreme Court verdict in November 2022, eligible members can now opt for a higher pension calculated on their actual basic salary. Are there any limitations to be aware of? Choosing a higher contribution to EPS will result in a higher pension after retirement, but it will also reduce your PF corpus since the additional pension contribution will be diverted from your provident fund. Who is eligible for a higher pension? Employees who were members of EPFO and EPS before September 1, 2014, and who are still in service but missed availing the higher pension option earlier can apply. Those who joined the workforce after this date and earn a basic salary higher than Rs 15,000 do not need to take any action. How do I opt for a higher pension? Both employers and employees must submit a joint declaration to the EPFO stating their intention to opt for a higher pension. The EPFO has an online facility and format available for this purpose. Visit the EPFO’s member portal and ensure your mobile number is linked to your Aadhaar. The EPFO will review the forms and contact you if any additional information or proofs are needed. What challenges may arise during the procedure? There could be difficulties in transferring pension funds from previous employers and ensuring that the contributory period is accurate. Calculating the amount of funds that need to be moved from the PF account to the pension scheme retrospectively may also pose a challenge. It is recommended to have salary slips or PF account statements for all past years to assist with the calculation. Do I need to provide proof of opting for a higher pension before September 2014? Earlier, proof of the joint request submitted to the EPFO was mandatory. However, the Kerala High Court relaxed this requirement, […]
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