EPFO Higher Pension Scheme 2023 | Benefits, Eligibility Criteria, Application Form

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EPFO Higher Pension Scheme 2023: Employees’ Provident Fund Organisation (EPFO) members are entitled to a pension after retirement. Currently, the employees and employers contribute 12% of their basic salary and dearness allowance to the EPF. Of the employer’s 12% contribution, 8.33% goes to the Employees’ Pension Scheme (EPS) and 3.67% to the EPF. However, the 8.33% EPS contribution is capped at the maximum amount of Rs.15,000 even when the employee draws a higher salary. The cap on the EPS contribution was introduced in 2014 through an amendment to the EPS. Before the EPS amendment in 2014, employees had the option to choose higher EPS contribution amounts. This article covers the EPFO circular on higher pensions and its claim process.

EPFO Higher Pension Scheme 2023 – Overview

What is EPFO Higher Pension Scheme?

Section 6A of the EPF Act saw the government launch the Employees Pension Scheme, 1995 (EPS-95) in 1995. As per the EPS-95, employers were required to contribute 8.33% of their employee’s salary towards the pension scheme, which had a maximum monthly pension of Rs.5,000 or Rs.6,000. Consequently, employers were contributing 8.33% of Rs.5,000, which was subsequently increased to Rs.6,500, to the pension scheme.

In March 1996, the EPS-95’s para 11(3) included a provision that permitted employers and employees to contribute 8.33% of the actual salary (over the Rs.5,000 or Rs.6,500 cap) to the EPS. Such higher salaries would be regarded as pensionable salaries. However, employees had six months to file a joint option form to contribute to the EPS for higher pensions.

The government amended the EPS-95 scheme in September 2014. The maximum pensionable salary was raised to Rs.15,000, and para 11(3)’s provision, which allowed the employer and employee to contribute to the EPS on a higher salary amount, was removed. Consequently, even if an employee earned a higher salary, employers would contribute 8.33% to EPS on a maximum of Rs.15,000 for employees joining the EPF scheme after 01/09/2014. However, employees who joined EPS-95 before 01/09/2014 or were part of it could contribute 8.33% to EPS on their actual salary instead of the Rs.15,000 cap if they filed a joint option with the EPFO by 28/02/2015.

EPFO Higher Pension Scheme Benefits

• The Higher Pension Scheme provides pension to retired employees based on years of service and average salary.
• To be eligible for this scheme, certain criteria need to be met which are detailed in the article.
• Government employees stand to benefit greatly from this scheme.
• Individuals with higher salaries in their current job position will receive a larger pension after retirement.
• This scheme will provide a source of income for individuals after retirement, even if they don’t have any investments or private business.
• The pension amount received after retirement is not affected by the market as it is based on years of service and average salary.

EPFO Higher Pension Scheme Eligibility Criteria

• The EPFO issued a circular in December 2022 outlining eligibility criteria and application process for claiming a higher pension.
• Employees who retired before 01/09/2014 and exercised the joint option under para 11(3) of EPS-95 while being a member of EPS-95 are eligible for a higher pension.
• Employees and employers who contributed EPS on salaries exceeding the wage ceiling of Rs.5,000 or Rs.6,500 are eligible for a higher pension.
• If the EPFO declined the exercise of such an option, employees are still eligible for a higher pension.
• However, the EPFO circular does not provide a higher pension option for employees who were part of the EPF before 01/09/2014 but still working/retired after 2014.
• Employees who were members before 01/09/2014 and continued to be members after that date and employees and employers who contributed to EPS on salaries exceeding the wage ceiling of Rs.5,000 or Rs.6,500 are eligible to file a joint option for a higher pension.
• Employees who were members of EPS-95 and exercised the joint options under the deleted para 11(3) of the EPS but did not file new joint options after the amendment of 2014 are not eligible to claim a higher pension.
• EPS contributions of such employees will be 8.33% on the maximum amount of Rs.15,000, irrespective of their actual salaries.

How to Apply for EPFO Higher Pension Scheme 2023?

To claim a higher pension amount/contribution, follow these steps:

• Go to the EPFO Unified Member portal.
• Click on the ‘Application form for joint option’ option.
• If you retired before 2014, click ‘Validation of joint options who retired before 01.09.2014 and exercised joint option’. If you retired after 2014, click ‘Exercise of joint option for employees who were in service prior to 01.09.2014 and continued to be in service 01.09.2014 but could not exercise the joint option’.
• Fill in the details and submit the form.

After submitting the form, the EPFO will digitally register the application and provide the receipt number. The respective employers will verify the application through e-sign/ digital signature. The RPFC will convert all applications into e-files. The concerned dealing assistant will examine the papers and forward the case to the section account officer/ supervisor. The account officer/ supervisor will mark discrepancies and send them to the Assistant Provident Fund Commissioners (APFC)/RPFC-II. The APFC/RPFC-II will examine the case and notify the applicant of the higher pension decision via email, post, phone or SMS.

EPFO Higher Pension Scheme Application Form Link

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