EPFO likely to come out with another detailed circular on higher pension
Contents News/Article Date: 5th January 2023
Relating to which Act The Employees Provident Funds & Miscellaneous Provisions Act, 1952
Applicable to which State: All the establishments in the States with PF coverage
Type: FE News Report
Pertains to Employers and employees of the PF & Pension Fund
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In the earlier and last instance, this private organization called the Employees’ Pension (1995) Coordination committee has written a letter to the PF Commissioner in response to the letter of the Additional Central PF commissioner (Pension) who had earlier issued directions for implementation as is contained in para 44 (ix) of the judgment dated 4/11/2022 of the Hon’ble Supreme Court within the stipulated timelines.
In this instance, it seems that there is confusion prevailing amongst members of the EPFO as well on how to apply, sources said the EPFO is likely to come out with more detailed guidelines soon. With a lack of clarity on how to implement its guidelines on part of the Supreme Court order on higher pension, the Employees’ Provident Fund Organisation is expected to issue a more detailed circular on the issue.
Subject: EPFO likely to come out with another detailed circular on higher pension
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EPFO likely to come out with another detailed circular on higher pension
With confusion prevailing amongst members of the EPFO as well on how to apply, sources said the EPFO is likely to come out with more detailed guidelines soon.
With a lack of clarity on how to implement its guidelines on part of the Supreme Court order on higher pension, the Employees’ Provident Fund Organisation is expected to issue a more detailed circular on the issue.
While the EPFO had last week issued a circular for accepting applications of subscribers who had contributed on higher actual wages but whose request for a higher pension was denied, field-level offices have said the guidelines are not clear enough.
“There is no clarity on how to include all the subscribers who will put in requests based on the circular. We are getting a large number of queries but are unable to
Further, there is not enough staff to deal with the huge number of applications that are expected to pour in, said R Krupakaran, General Secretary, All India EPF Staff Federation. “The number of people working in the pension division is very small and more people would be required for responding to all the applications,” he said.
With confusion prevailing amongst members of the EPFO as well on how to apply, sources said the EPFO is likely to come out with more detailed guidelines soon.
The retirement fund manager had last week said that pensioners who, as employees, had contributed to the Employees’ Pension Scheme on salaries exceeding the then prevalent wage caps of Rs 5,000 and Rs 6,000 and had jointly applied with their employers for such a contribution, but whose request was declined by the PF authorities, can now apply digitally or online on the EPFO website.
The Supreme Court in its ruling in November 2022 upheld the Employees’ Pension Scheme amendment of 2014, giving another opportunity to subscribers to opt for the higher pension pay-out. Employees who were existing EPS members as on September 1, 2014, can contribute up to 8.33% of their ‘actual’ salaries — as against 8.33% of the capped salary — towards pension. However, this part of the order has been suspended for six months, during which time the legislature may bring in amendments to generate additional sources of funds for the EPS Scheme.
Khaitan & Co in a note said that the EPFO circular focuses only on those members who, while being members on the said date, also went ahead and opted for higher contributions during the 6-month timeline but were not allowed to do so by an authority of the EPFO. “It is for this reason that several employees and their representative bodies have already expressed concerns over the manner in which EPFO has dealt with the directions of the apex court, which had allowed such facility also to Non-Opting Members as of 1 September 2014,” they said.
Further, it was anticipated that the EPFO would clarify the eligibility of new employees earning a monthly pay in excess of Rs 15,000 per month to become a member of the EPS Scheme or make higher contributions, considering that the court did not specifically deal with the case of such employees. “However, the EPFO has not done so as yet,” they said, adding that it is hoped that further circulars and clarifications from the body will offer some guidance on the abovementioned aspects.