EPFO Higher Pension 2024, Latest Circular, Guidelines, Apply Online Link

EPFO Higher Pension :- The EPFO extended the deadline for selecting a higher pension to 2024. Employees who started working before September 1, 2014, and those who worked on or after that date but couldn’t activate their joint option under the Employees’ Pension Plan now have until 2024, to do so. Find detailed information about the EPFO Higher Pension Scheme, including highlights, benefits, eligibility criteria, contributions under EPS, considerations before choosing a higher pension, and steps to apply.

EPFO Higher Pension Scheme 2024

The Employees Provident Fund (EPF) deducts 12% of an employee’s basic pay monthly, matched by the employer. This contributes to the EPF account, providing a lump sum payment at retirement. An 8.33% contribution may go to the Employee’s Pension Plan (EPS) for guaranteed pensions. Changes since September 1, 2014, raised the salary cap to Rs. 15,000 for EPS calculations, impacting those earning more. Labor unions opposed these changes, leading to a Supreme Court decision in November 2022.

EPFO Higher Pension Scheme 2024

On 2024, the EPFO extended the deadline to 2024, for higher pension requests under EPS. Retirees opting for increased pensions under EPS 95 before September 1, 2014, also gained an extended deadline. The Supreme Court ruled that retirees before September 1, 2014, choosing pension options under paragraph 11(3) are entitled to increased pensions. To receive a larger pension, individuals can contribute more to the EPS, up to 8.33% of their salary. The company’s contribution is limited to 8.33% of Rs. 15,000, but individuals can choose to contribute more for a higher pension in retirement.

EPFO Higher Pension Overview

Name EPFO Higher Pension Scheme
Beneficiaries Employees
Deadline Extended by Employees’ Provident Fund Organization (EPFO)
Year 2024
Category Sarkari Yojana
Official Website https://unifiedportal-mem.epfindia.gov.in/memberinterface/

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EPFO Higher Pension Yojana Benefits

The EPFO Higher Pension Scheme offers these advantages:

  • A larger monthly pension during retirement.
  • Particularly beneficial if you lack other income sources.
  • Your fixed pension amount remains unaffected by market fluctuations, determined by your years of service and average wage.

EPFO Higher Pension Scheme Eligibility Criteria

The eligibility criteria for the EPFO Higher Pension Scheme are:

  • Members of the Employees’ Provident Fund Organization (EPFO) qualify for a pension upon retirement.
  • To be eligible for a higher pension, you must have been a member of the Employees’ Pension Plan (EPS) for a minimum of 10 years, and your age should be either 50 or 58 years, depending on when you joined the EPS.

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EPS Contribution

After the 2014 amendment, issues arose with pension contributions on higher salaries. Many workers realized that the exercised joint option to contribute to pensions based on higher income was not being acknowledged by the EPFO. Despite employers contributing 8.33% of the pension on actual pay, the pension calculation continued to use the pensionable salary of Rs. 15,000. In pursuit of higher pensions aligned with actual wage contributions, several employees filed cases in High Courts, eventually reaching the Supreme Court. The Supreme Court’s ruling is outlined as follows:

Employee Status Exercise of Joint Option Eligibility for 8.33% of a Higher Salary’s Pension Contribution Higher Pension Claim Mode
In service as of September 1, 2014 (Retired or Currently Employed) Joint option exercised and rejected by EPFO Yes File higher pension claim application
Retired before September 1, 2014 Joint option exercised and rejected by EPFO Yes File joint option and higher pension claim application
In service as of September 1, 2014 Not exercised joint option but contributing to EPS above the cap of Rs. 5,000/Rs. 6,500 Yes Exercise joint option by May 3, 2023, for higher pension
Retired before September 1, 2014 Not exercised joint option No Not applicable for higher pension

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Application Deadline For EPFO Higher Pension Scheme

Until 2024, individuals can apply for an increased pension through the Employees’ Pension Scheme (EPS). Starting September 1, 2014, members of the Employees’ Provident Fund Organization (EPFO) can now choose a higher pension based on their actual basic wages. This directive from the EPFO enables older members to pursue larger pensions by contributing up to 8.33 percent to the EPS, exceeding the monthly cap of Rs 15,000 in pensionable salary.

Make Before Considerations Choosing a Higher Pension

Considerations before choosing a Higher Pension:

  • Cost: Opting for a higher pension means contributing more to the EPS. While the employer’s contribution is limited, you can voluntarily contribute up to 8.33% of your pay. To secure a higher pension, additional contributions are necessary if your salary exceeds Rs. 15,000.
  • Tax Implications: It’s crucial to note that the lump sum from the provident fund is tax-free, but the pension amount is taxable. If you have other sources of income and fall into a higher tax bracket, taxes can significantly impact your pension earnings.
  • Lump Sum vs. Pension: Choosing a higher pension may come at the expense of a lump sum payment. Consider this trade-off based on your preference for a steady pension income after retirement versus a larger lump sum.
  • Death Benefit: In case of the EPF subscriber’s demise, legal heirs receive only 50% of the qualifying pension. Choosing a higher pension might result in a reduced death benefit compared to opting for a larger lump sum.
  • Long-term Planning: Assess your long-term retirement plans. If you have alternative retirement income sources, a larger EPS pension may not be necessary. However, it can be advantageous if you lack other retirement income. Your financial situation and retirement goals should guide your decision. Consult with a financial advisor for an informed choice, weighing the costs and benefits carefully.

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How to Apply for EPFO Higher Pension Yojana 2024?

To apply for the EPFO Higher Pension Scheme, follow these steps:

  • Visit the official EPFO Unified Member portal website https://unifiedportal-mem.epfindia.gov.in/.
  • On the homepage, find the link “Pension on Higher Salary: Exercise of Joint Option under para 11(3) and para 11(4) of EPS-1995 on or before the 2024” under important links.
  • Click on the “Application form for the joint option” link on the new page.
  • Choose the appropriate option based on your retirement date:
    • Select “Validation of joint options who retired before 01.09.2014 and executed joint option” if you left your job before that year.
    • Select “Exercise of joint option for employees who were in service before 01.09.2014 and continued to be in service 01.09.2014 but were unable to exercise the joint option” if you retired after that year.
  • Fill in the application form with the necessary details.
  • Click on the Submit button.
  • EPFO will digitally register each application and provide a receipt number.
  • Applications will be sent to employers for verification through e-signature or digital signature.
  • RPFC will transform all applications into e-files.
  • The responsible dealing assistant will forward the documents to the section account officer or supervisor.
  • Discrepancies, if any, will be noted and sent to the Assistant Provident Fund Commissioners (APFC)/RPFC-II.
  • After review, APFC/RPFC-II will notify applicants of the higher pension decision through email, mail, phone, or SMS.

EPF Higher Pensions Calculating Formula

The EPF pension formula is straightforward: Monthly Pension = (Average Monthly Salary for the Last 60 Months * Pensionable Service) / 70

Here’s a breakdown:

  • The pensionable salary is the average of the last 60 months’ wages.
  • Pensionable service is the number of years payments were made to the EPS account.

If an employee retires at 58 after serving for over 20 years, an additional weightage of 2 years is given. However, the maximum limit for pensionable service is 35 years.

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Conclusion

In conclusion, the latest circular and guidelines from EPFO Higher Pension in 2024 offer valuable insights for those seeking enhanced retirement benefits. With an extended deadline until 2024, employees can apply online and take a look the eligibility criteria and contribution details. This initiative ensures individuals make informed decisions to secure a higher pension, providing financial stability during retirement. Stay updated with the official circular for comprehensive information and the application link, paving the way for a secure and fulfilling post-employment future.

FAQ’s

What is the significance of the latest circular from EPFO regarding Higher Pension in 2024?

The circular provides updated guidelines and information on how individuals can avail themselves of a higher pension through EPFO.

How can I apply online for the EPFO Higher Pension?

The online application link is provided in the circular. Visit the official EPFO website for the application process.

Is there any specific eligibility criteria mentioned in the circular?

Yes, the circular details the eligibility criteria for individuals seeking a higher pension, including the relevant work periods and conditions.

Can individuals who started working before September 1, 2014, still apply for the Higher Pension?

Yes, employees who commenced work before this date are eligible to apply, and the circular provides specific instructions for them.

What considerations should I keep in mind before choosing a Higher Pension?

The circular may provide insights into factors like financial planning, retirement goals, and the impact of increased contributions on overall benefits.

Are there any specific documents required for the online application?

Check the circular for a list of required documents to facilitate a smooth online application process for the EPFO Higher Pension.

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