EPFO Higher Pension 2023 ~ Apply Direct Link, Form, Last Date

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The deadline to choose a higher pension was extended by the Employees’ Provident Fund Organization (EPFO) on Monday to May 3. Workers who started working before September 1, 2014 and kept on working on or after that date may now activate their joint option under the Employees’ Pension Plan before May 3, 2023. Learn more about the EPFO Higher Pension Scheme in the sections below, including its features, benefits, eligibility requirements, contributions made under the EPS, considerations to think about before choosing a higher pension, how to apply for an EPFO Higher Pension, and much more.

EPFO Higher Pension Highlights

NameEPFO Higher Pension Scheme
Deadline Extended byEmployees’ Provident Fund Organization (EPFO)
Last DateMay 3, 2023
Official Websitehttps://unifiedportal-mem.epfindia.gov.in/memberinterface/

EPFO Higher Pension Scheme 2023

12% of an employee’s basic pay is deducted each month and put into the Employees Provident Fund, or EPF (plus any permanent components like DA). When you retire, you receive a lump sum payout that is matched by your employer and includes annual interest details. Your payment of 12 per cent goes entirely into your EPF account, while your employer’s 8.33 per cent contribution usually goes into the Employee’s Pension Plan, or EPS, a separate programme for guaranteed pension payouts after retirement. On September 1, 2014, the government implemented a number of amendments. The 8.33% EPS contribution is computed at a maximum salary of Rs. 15,000.

Up to that point, the salary cap was Rs 6,500, although companies might contribute more based on actual pay. It was also claimed that employees hired after September 1, 2014, who made more than Rs 15,000 per month, were no longer eligible to benefit from EPS. The labour unions did not like these changes, thus they successfully sued the EPFO in high courts. In November 2022, the Supreme Court (SC), which heard the EPFO’s appeal, issued its decision.

Benefits of EPFO Higher Pension Scheme

  • If you have a greater pension, you’ll receive a larger monthly check during retirement.
  • If you don’t have any other sources of income, this can be quite beneficial.
  • Your pension amount is fixed and unaffected by market movements because it is based on your years of service and average wage.

Eligibility Criteria for EPFO Higher Pension Scheme

  • Members of the Employees’ Provident Fund Organization (EPFO) are eligible for a pension after retirement.
  • You must have been a member of the Employees’ Pension Plan (EPS) for a minimum of 10 years and be 50 or 58 years old to qualify for a higher pension (depending on your joining in the EPS).

EPFO Higher Pension Scheme Contribution under EPS

Employee StatusExercise of Joint OptionEligibility for 8.33% of a Higher Salary’s Pension ContributionHigher Pension Claim Mode
Employees in service as of 01- September-2014Exercised joint option and rejected by the EPFOYesBy filing a higher pension claim application
Employees retired before 01- September-2014Exercised joint option and rejected by the EPFOYesBy filing a joint option and higher pension claim application
Employees in service as of 01- September-2014Not exercised joint option but contributing to EPS above the cap of Rs.5,000/Rs,6,500YesBy exercising the joint option within 03/05/2023
Employees retired before 01- September-2014Not exercising a joint optionNoNot applicable

Considerations to make before Choosing a Higher Pension

Some of the considerations to make before choosing a Higher Pension are as follows:

  • Cost: Choosing a greater pension entails paying more into the EPS. The employer contribution is capped at 8.33% of Rs 15,000 per month; however, you can choose to contribute up to 8.33% of your pay to the EPS (i.e., Rs 1,250 per month). So, to receive a greater pension if your monthly salary exceeds Rs. 15,000, you must make an additional voluntary contribution to the EPS.
  • Taxable vs. tax-free: It’s important to keep in mind that the lump sum from the provident fund is tax-free, however, the pension amount would be taxable. As a result, if you have additional sources of income and are in a higher tax category, the amount of your pension will be reduced due to taxes.
  • Instead of a lump sum: Before anything else, you should be informed that a greater pension will be provided at the expense of a lump sum payment. So, it should only be selected if you prefer a greater pension after retirement to a higher lump payment.
  • In the event of death: If an EPF subscriber passes away, their legal heirs and nominees are only eligible to receive 50% of the qualifying pension that the subscriber would have otherwise received. As a result, if the subscriber passes away before expected, the family will suffer a significant financial loss compared to the greater lump amount option.
  • Long-term planning: When considering whether to choose a bigger pension, you should take your long-term retirement plans into account. You might not require a larger EPS pension if you have alternative retirement income options (such as a personal pension or investments). A greater EPS pension, however, can be advantageous if you don’t have any other sources of retirement income. Your unique financial condition and retirement objectives will influence whether you choose a larger EPS pension. When choosing a choice, you should carefully weigh the costs and rewards. To make an informed choice, it can be beneficial to speak with a financial counsellor.

Steps to Apply for an EPFO Higher Pension Scheme 2023

To apply for an EPFO Higher Pension Scheme, the employee needs to follow the below-given steps:

  • First of all, go to the official website of the EPFO Unified Member Portal
  • The homepage of the website will open on the screen
  • Under important links, click on the Pension on Higher Salary: Exercise of Joint Option under para 11(3) and para 11(4) of EPS-1995 on or before the 3rd May 2023 link
  • A new page will open on the screen with two options:
    • Application form for validation of joint options
    • Application form for joint options
  • Click on the Application form for the joint option link
  • A new page will open on the screen with two options:
    • Select “Validation of joint options who retired before 01.09.2014 and executed joint option” if you left your job before that year.
    • Select “Exercise of joint option for employees who were in service before 01.09.2014 and continued to be in service 01.09.2014 but were unable to exercise the joint option” if you retired after that year.
  • After selecting one of the options, an application form will open on the screen
  • Now, fill in the form with all the required details
  • After that, click on the Submit button
  • Each application will be digitally registered by the EPFO, and the applicant will receive a receipt number. It will send the applications to the appropriate employers, who will check them through an e-signature or digital signature before continuing with the application process.
  •  All applications will be transformed into e-files by the RPFC.
  • After reviewing the documents, the responsible dealing assistant will forward the matter to the section account officer or supervisor.
  •  Discrepancies would be noted by the concerned account officer or supervisor following examination and sent to the Assistant Provident Fund Commissioners (APFC)/RPFC-II.
  • After reviewing the application, the APFC/RPFC-II will notify the applicants by email, mail, phone, or SMS of the higher pension decision.

The formula for Calculating EPF Higher Pensions

The following is the EPF pension formula:

Monthly pension amount = (Pensionable Salary * Pensionable Service)/70

  • The average of the last 60 months’ wages is referred to as the pensionable salary.
  • The number of years that payments were made to the EPS account is referred to as pensionable service.

A weightage of 2 years will be applied to the service duration if an employee superannuates at age 58 after providing pensionable services of more than 20 years. Even though, there is a 35-year limit for pensionable service.

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