The Employees’ Provident Fund Organisation (EPFO) is likely to publish a circular soon on the procedures for exercising option for higher pension as part of implementing the November 4 judgment of the Supreme Court on the matter. The EPFO’s website will also have a window for its members to upload the joint option with employers. Considering a recent verdict of the Madras High Court, the subscribers can also submit the joint options offline too.
Sources in the EPFO told The Hindu that existing employees who are members of the Employees’ Pension Scheme and those who retired after September 1, 2014 can give options using this window and at respective EPFO offices. The EPFO, through two recent circulars, had explained the avenues for those who retired before September 1, 2014 and had not submitted joint options before their retirement. The Supreme Court had given four months’ time, which ends on March 4, 2023, to eligible employees to submit options for higher pension based on salaries above the threshold limit of ₹15,000.
Pensioners’ organisations had alleged that the EPFO’s decision to recover higher pension from those employees who had retired before September 1, 2014 and not submitted joint option under paragraph 11(3) of the Employees’ Pension Scheme (EPS) will impact thousands of pensioners. Countering this, an official said only a verification process will make it clear about the number of pensioners who would be affected by the decision. “Our assessment is that the recovery proceedings could be initiated against some pensioners who may have erroneously drawn higher pension without submitting joint option for higher pension based on higher salary. This number of pensioners is likely to be small,” the official, who wished not to be named, said.
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The EPFO may also modify the EPS based on the number of new employees for higher pension. “We have to look at the cost effectiveness of the scheme. At the moment, it is the best pension scheme available in the market. We expect more employees to opt for this. But after all, the scheme is run by employees’ and employers’ contributions and we have to make sure that it benefits everyone in an equal manner,” the senior officer said. The EPFO also wants to ensure that the EPS functions in the future based on direct contribution, without any reverse cross subsidies.
The official said the Supreme Court order was clear that those who retired before September 1, 2014 and had not remitted premium for PF pension on higher wages and not exercised option for higher pension would not be eligible to exercise option now for higher pension. The circular will have directions for currently working EPS subscribers to opt for higher pension, but by paying the premium from back period. “This premium amount can be transferred to the pension account from the PF account of the employee,” the officer said. The window will have options for those who retired after September 1, 2014 to opt for higher pension.
Role of employer
The official said the employer’s role is very important in the process as it is the duty of the employer to duly certify the wage details of an employee. “We expect a transparent process here to avoid further problems,” the EPFO official said.
The EPFO had recently issued two circulars, both with directions to employees who retired before September 1, 2014. A window in the EPFO was also opened for those retirees to submit applications for validation of joint options, if they had exercised option but the same were rejected or if they have paid premium for higher pension based on higher salary which was refunded.