With regard to a major development for EPFO members, over 22,000 persons will be receiving higher monthly pension after the Supreme Court judgement in 2022 concerning EPS-95. That, however, comes with the caveat of needing more than 1.65 lakh members to contribute additionally in order to be eligible for higher benefits.
Background: Supreme Court Directive
The court had held that many eligible EPFO members could opt for a higher pension under the EPS if they were contributing to pension fund on their actual salaries, and not on the statutory wage limit. Until then, the limit for contribution to EPS was allegedly capped at ₹15,000 per month. The higher castes, however, had been contributing on higher salaries and now have been given the respite of claiming proportionate pension.
Eligibility
Per data from EPFO, around 1.74 lakh applications had been made by employees opting for a higher pension under the provision. After scrutiny, 22,000 members have met all requirements of eligibility and have begun receiving enhanced pension payouts.
On the other hand, the remaining 1.65 lakh of these were asked to make additional contributions along with interest from the time of their joining in EPS. This retroactive payment is so that their contributions can be brought in alignment with the higher pension benefits.
Additional Contribution Requirements
The EPFO has clarified members will now have to pay the differential amount between the statutory contribution of 8.33% for EPS on the wage ceiling and the actual contribution of 8.33% on the higher salary. Thus, depending upon the number of service years and levels of salary, this may amount to several lakhs of rupees.
The authority has provided an online platform for the members whereby they can check the shortfall in their contribution and make payments thereon. This window for making payments shall remain open for a few limited days and any loss of time should impact the eligibility for the revised pension.
Conclusion
While the move offers substantial financial relief and long-term pension security to the eligible members of EPFO, the additional contribution requirements may indeed pose as hurdles for many. Members should perhaps assess their financial capacity and interact with the employer or the concerned EPFO office for assistance in completing the process.
Also Read:Massive Relief Approved: 50 Lakh Employees, 65 Lakh Pensioners To Gain Major Perks