After Supreme Court’s recent judgement, EPFO has announced about EPFO HIGHER PENSION SCHEME 2023. As per Judgement the retirement fund body has now allowed subscribers to go beyond the pensionable salary capped at ₹15,000 a month. The employers deduct a sum equal to 8.33% of the ‘actual basic salary’ towards pension under the Employee Pension Scheme (EPS).
What are the new rules for EPF pension?
The pension amount will increase as a result of the new rules allowing you to raise your pensionable salary from the previous cap of Rs 15,000 to your actual basic salary. KEY HIGHLIGHTS: Your pension is paid based on your pensionable earnings and pensionable service when you retire.
Who are eligible for higher pension in EPFO
To be eligible for benefits under this program, you must be between the ages of 50 and 58 and have worked as a government employee with an employee pension plan for at least ten years. You must be working for government since before 1st September 2014 and after that date too.
Is higher pension scheme beneficial?
For those who want a larger sum but won’t need much money in retirement, it is a significant advantage. The increased pension contribution raises the monthly pension amount while decreasing the EPF lump sum payment granted to an employee on retirement.
How to apply higher pension in EPFO?
Step 1: Head to the member e-Sewa portal.
Step 2: Click on the pension on higher salary: exercise of joint option.
Step 3: Select the ‘application form for joint options.
Step 4: Enter the details, including UAN, name, DOB, Aadhaar number, Aadhaar-linked mobile number and captcha.
Step 5: Enter the OTP received on your Aadhaar-registered mobile number.
Step 6: Submit the application.
An acknowledgement number will be generated upon submission of the application form.
Last Date of apply
As per Supreme Court judgement, eligible employees can opt for higher pension from EPS within 4 months of the date of the judgement. The verdict came on November 4, 2022, which makes the last date for applying for higher EPS pension March 3, 2023 which later got extended up to May, 2023.
Who is eligible for EPS nominee?
Any person is eligible to be a nominee while enrolled in the EPS plan or a dependent plan. For both male and female members, the rule is unchanged. Nominations for the EPF/EDLI scheme may be made for any person or persons, regardless of the member’s gender, whether they are related to him or not, or even for an institution.
How the pension amount will be calculated?
Formula for calculating EPF higher pension is as follows: Monthly pension amount = (Pensionable salary X pensionable service)/70. Suppose an individual has worked for 19 years and 8 months, the employee would be considered to have worked for 20 years. However, if the working period was 19 years and 4 months, then 19 years would be taken for pension calculation.If an employee has rendered service of 20 years or more under the EPF Scheme, then two years is added to the service period. This service period can be with one employer or with different employers, provided they are covered under the EPF Scheme. Do note that the maximum service period under the EPS is 35 years.Suppose an employee who has worked for 22 years with multiple employers while continuously making contributions to the EPF and EPS accounts. The pensionable salary is capped at Rs 15,000, according to the EPF law. The eligible pension amount would be Rs 4,500 – (15,000X22)/70. Now, if the bonus service years (2 years) are added to the pensionable service years, the pension amount would become Rs 4,929 – Rs (15,000X24)/70.
Here Pensionable Salary means average salary of last 60 months
Official Website
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