The Employees’ Provident Fund Organization (EPFO) has issued a circular to its regional offices on Monday with a set of instructions to execute the Supreme Court’s November 4 verdict on greater provident fund (PF) pension, after days of deliberation.
Documents and steps for claiming a higher pension based on real income beyond the stipulated maximum of the Employees’ Pension Plan (EPS) of 1995 are outlined for both current and retiring workers. The EPFO website will “soon” include a members’ area where employees and employers may submit the joint choice together.
In the circular, Regional PF Commissioner (Pension) Aprajita Jaggi said that workers “would be eligible to exercise joint option” if they did not previously do so under paragraph 11(3) of the EPS. Those who have worked and paid into EPS but haven’t yet applied for the increased pension based on their real salaries have until September 1, 2014 to do so. Adjustments from the Provident Fund to the Pension Fund, as well as any re-deposits to the fund, need the permission of both the employee and the employer, which must be submitted to the EPFO. \
In the circular, it was stated that “in case of employees of un-exempted establishments, refund of requisite employer’s share of contribution, the same shall be deposited with interest at the rate declared under Para 60 of the EPF Scheme, 1952, till the date of actual refund,” with the method of deposit and that of computing pension to follow in a subsequent circular.
The EPFO met for days to discuss how to execute the Supreme Court’s November 4 ruling on greater provident fund (PF) pension, and on Monday they sent out a circular with a set of instructions to their regional offices. It details the steps that current workers and retirees with an effective date after September 1, 2014 need to do and the paperwork they need to submit in order to get a pension based on their real pay rather than the maximum allowed under the Employees’ Pension Plan (EPS) of 1995.
Soon, employees will be able to access the members-only area of the EPFO website, where they may submit the joint choice with their employers. Employer groups hailed the circular, but labour groups claimed it was sent too late and will bother retirees more since the Supreme Court’s March 3 deadline for submitting joint choices had already passed.
Workers and retirees who made EPS contributions but who did not use the option to get a higher pension based on their real wage by September 1, 2014 are now eligible to do so. Adjustments from the Provident Fund to the Pension Fund, as well as any re-deposits to the fund, need the permission of both the employee and the employer, which must be submitted to the EPFO.
Pension calculation
In the circular, it was stated that “in case of employees of un-exempted establishments, refund of requisite employer’s share of contribution, the same shall be deposited with interest at the rate declared under Para 60 of the EPF Scheme, 1952, till the date of actual refund,” with the method of deposit and that of computing pension to follow in a subsequent circular.
K.E. Raghunathan, a member of the Central Board of Trustees who represents businesses, praised the circular for providing much needed clarity and streamlining the procedure for requesting pension increases based on salary. All other speculations have been put to rest by this. His words, “We must comprehend the complexities and cost repercussions,” ring true.
Currently, the new circular lacks a deadline by which the joint choice must be submitted. The Supreme Court-mandated deadline of March 3 is rapidly approaching. Employees and retirees have 10 days to submit various required paperwork. This procedure should have been initiated by the EPFO prior to December 29. The EPFO is acting completely independently. “The CBT meeting has to be scheduled right now,” he said.
