Learn about the process of obtaining a higher pension under the EPS 95 scheme through Para 26(6) of the EPF scheme and the guidelines issued by the EPFO.

1. EPFO vide circular dated 20.02.2023 laid down the guidelines for the employees who were members of the EPS scheme as on 01.09.2014 and continued to be in service on or after September 1 2014 .

2. Earlier the Apex Court in its order dated November 4, 2022, had mandated the EPFO to provide four months to all eligible members to opt for higher pensions. The four-month period for opting for a higher pension was to end on March 3, 2023; the last date has now been extended to May 3, 2023.

3. The EPFO has enabled the URL of the unified members’ portal which states that subscribers seeking a higher pension can apply for it by May 3, 2023.

4. In this article, let us try to understand the most confusing clause to apply for a higher pension – Permission under Para 26(6) of the EPF scheme.

Permission under Para 26(6)

5. Background: The EPF Act was promulgated in the year 1952.Employees whose ‘pay’ was more than Rs 5000/- were considered excluded employees and not eligible to be a member of the EPF Scheme.

5.1 However, Section 26(6) of the Act allows them to enroll as a member of the EPF scheme by filing a joint declaration of employee and employer of the establishment, subject to approval by the Assistant Commissioner of PF.

5.2 Practically, the requirement under sec 26(6) was ignored by both the employers and employees. They started contributing PF on higher wages without complying with the provisions of Para 26(6). Even EPFO also accepted such a contribution of PF on higher wages.

5.3 When the EPS-95 scheme was introduced in 1995, employees drawing more than the ceiling limit were not excluded from the membership. Instead, it was provided that out of the employer’s share of the provident fund, 8.33% of the capped salary will be transferred to Pension Fund. The ceiling limit was Rs 5000 till May 2001, and Rs 6500/- till 31.08.2014.

5.4 The exclusion was  introduced vide  Para 3 of the G.S.R.609(E) amendment dated 22.08.2014 stating that EPF members drawing salary more than Rs 15000 were required to exercise a fresh option to continue contributing towards the pension scheme on their actual salary w.e.f. 01.09.2014

5.6 Until 01.09.2014, the proviso to Para 11(3) of the EPS 95 scheme has given an option to the employer and employee to contribute a percentage of the actual salary (i.e. not necessarily up to the ceiling limit of Rs 5,000), provided the employee and the employer has no objection.

5.7 There were certain restrictions as regards the time for exercising such an option and the matter ultimately went to Supreme Court. In the case of R.C. Gupta (supra), it was held that A beneficial scheme, ought not to be allowed to be defeated for any reason, particularly in a situation where the employer had deposited 12% of the actual salary and not 12% of the ceiling limit of Rs 5000/- or Rs 6500/- as the case may be, in provident Fund.

5.8 Afterward, the EPFO itself relaxed the requirement of a formal joint option, vide Para 2 of the circular dated 22.01.2019. The extract of the said circular is given below: –

EPFO Circular Extract

6. Present Scenario: Now, in the online form to be submitted by the employee, it is mandatory to attach permission under Para 26(6) of EPF. The majority of the employees are not even aware of this provision.

7. What is the way out? The employer can provide the undertaking that the employee is contributing to EPF on actual salary as per the terms of Para 26(6) of the EPF 1952 scheme. An equal share is also contributed by the employer.  The employee will scan and upload the form while submitting the application form for a higher pension.

8. This is also in line with the amended EPS Scheme 2014. Para 11(4) of the amended scheme stipulated that the EPF members drawing salary more than Rs 15000 were required to exercise a fresh option to continue contributing the pension amount on their actual salary. The Supreme Court vide judgment dated 04.11.2022 allowed 4 months (extended by EPFO till 03 May 2023) to exercise this option.

9. During an interactive session (virtual), organized jointly by the Employers’ Federation of India and Confederation of Indian Industries with the Central Provident Fund Commissioner and Regional Provident Fund Commissioner-Pension, Employees’ Provident Fund Organization, New Delhi, the issue was discussed in detail. The clarification given by Smt. Aparajitha Jaggi, RPFC-Pension has been brought out in the following Paragraph:

9.1 The employee/employer should submit a Joint declaration complete in all respect. However, if a declaration under para 26(6) of the EPF Scheme is not available and is not attached to the Joint Declaration, a Joint declaration may be submitted without such declaration and as and when such declaration is traced, it should be submitted. The EPFO, Head office would decide whether declaration under para 26(6) is to be insisted or otherwise if warranted at a later stage.

9.2 Thus, it is advisable that the employees shall attach an undertaking/declaration duly verified by the employer.

10. The online submission of application by the employees is a first step towards higher pension under EPS 95 scheme. After that, the application will land in the employer’s login. The employer will verify the applications with a digital signature and then processing of the applications will be commenced by RPFC.

11. The lack of clarity among employees and the absence of clarification by the EPFO will result in further delay and that could defeat the purpose of the Court Order.

Also Read: 

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Disclaimer: The article is for educational purposes only

The author can be approached at caanitabhadra@gmail.com

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158 Comments

  1. saikat das says:

    Ms Anita,
    Now the option to upload joint declaration 26(6) is not mandatory in the online form to opt for higher pension. Does this mean this declaration is not needed anymore. Anyways we have been contributing as per actual salary which is more than Rs 15000/-

  2. GANESH says:

    Past employment or service history is not reflected correctly in the EPFO portal under my UAN

    The missing service history information is that of the below

    Is it possible to get this updated by the employer , using employee login I am not able to do the same

    i have worked in two organisations prior to when UAN came in , Dec 2000 to Feb 2005 and Feb 2005 to Jul 2012. What should I do to get this reflected.

    Also when I left the first organisation i withdrew the EPF amount, so whether that service will be considered for the higher pension calculation ?

  3. R Lakshminarayanan says:

    Madam,

    I retired 2011 after retirement I am getting family pension 1800. Our company is exempted organization. As per court verdict dt 4.1122 ,both exempted and non exempted employees are eligible for higher pension. Due to exempted clause, we were not in a position to give joint prior to 2014. However, instead of joint option, we submitted on line documents alongwith 26 which was given by our employer. ( this is puublic sector undertaking, closed recently).
    Kindly advise, whether I am eligible for higher pension or not?
    Waiting for your early reply
    Thanks and best regards
    Lakshminarayanan

  4. yash jain says:

    Hello Mam, I have 2 questions. 1.I retired in 2019. and my monthly pension as per old pension scheme is around 3000. If I opt for new pension scheme, it will get increased to 25000 (estimated). My question is will I get the differential amount from 2019, i.e. (25000-3000) = 22000 per month*12*no. of years, if I opt for higher pension scheme. 2. also, the amount which will get deducted from pf will be from employer’s pf contribution with interest, right? will my interest after the retirement i.e., 2019 will also get deducted if I opt for higher pension scheme? Please help.

  5. Sunil A Gokani says:

    Madam,

    Is there any possibility of extension of date for submission of online application form/declaration beyond 3.5.23 for enhancement of Pension since as of date certain points are still not clear as per article in today’s Times of India newspaper on page number 11 ?

    kindly revert promptly.

    Regards

  6. Jayakumar says:

    Dear madam. we have submitted joint declaration form without uploading form 26{6}. now we have received 26(6) from employer. can we submit this now and how we have to submit this

  7. Ravi Warrier says:

    I have uploaded the joint declaration for higher pension on 21st April. Still the status is showing as pending at Employer. I have checked with my HR and they confirmed that nothing is showing in portal for approval. What could be the reason if it is not showing in employer portal for approval. Pl. help..

    1. ANITA BHADRA says:

      It will reflect in Employers login soon.

      Now only it started flowing in employer’s login.

      Employer need to click on Approve POHW ( Pension on Higher Wages ) request .

  8. krishna murthy says:

    How this higher pension scheme applicable for Pvt engineering educational institutions where 12% not done only ceiling limit 15000 taken and deducted 1800.

  9. PAVANKUMAR ILLURU says:

    A few days back i have submitted physical documents at epfo office, and then uploaded online for higher pension while uploading PENSION CONTRIBUTION CARD FOR SOME YEARS for members not uploaded by oversight given by employer, is there any option to upload

  10. N G Srinivasan says:

    Dear Ms.Anita,
    Kindly provide some clarity on the following questions that are bothering us.
    1. If a person retired in May 2018, will the amount he needs to pay back be the differential amount with interest till his date of retirement or will the interest be calculated till May 2023?
    2. If he submits a Notarised undertaking now while applying for higher pension that he would make the payment with interest but fails to do so when the demand is made by EPFO after approving his joint application, what would be the consequences?
    3. As we understand, the EPFO or the Govt is at liberty to change the pension calculation formula. Will they declare the new scheme before the 3rd May deadline to submit the application? In the absence of any clarity on how much pension I am likely to get, how can I make a decision whether to apply or not or whether it is worth applying?
    4. Will we get arrears of pension from the date of retirement or will the scheme be implemented prospectively?
    5. Will the current pension stop the moment I apply for higher pension under EPS 95?

    Thanking you in advance.

    Regards,
    NGS

    1. ANITA BHADRA says:

      1. The differential amount with interest will be calculated till May 2023.
      2. There is no clarity on this issue from EPFO. To the best of my limited understanding , if you fails to make the payment , there will not be adverse consequences. Your pension will be calculated as per current provision( on capped salary ).
      3. EPFO and GOVT are at liberty to change the formula, but very unlikely that it will get changed before 3rd May .
      4. The employees should get arrears of pension from the date of retirement. So far , no comments/ guidelines from EPFO on this issue.
      5. Current pension will not be stopped

      1. N G Srinivasan says:

        Dear Ms.Anita,
        Thanks for the prompt response.
        If the interest has to be paid till May 2023 ( the amount will be very high) and if there is no commitment from EPFO on arrears or pension calculation formula, then I will not take the risk of applying for higher pension. That’s strictly my opinion.
        In case there is any further clarity on the questions I raised before the 3rd May deadline, kindly update the same.
        Thanks and Regards,
        NGS

  11. N G Srinivasan says:

    Darr Ms.Anita,
    Kindly provide some clarity on the following questions that are bothering us.
    1. If a person retired in May 2018, will the amount he needs to pay back be the differential amount with interest till his date of retirement or will the interest be calculated till May 2023?
    2. If he submits a Notarised undertaking now while applying for higher pension that he would make the payment with interest but fails to do so when the demand is made by EPFO after approving his joint application, what would be the consequences?
    3. As we understand, the EPFO or the Govt is at liberty to change the pension calculation formula. Will they declare the new scheme before the 3rd May deadline to submit the application? In the absence of any clarity on how much pension I am likely to get, how can I make a decision whether to apply or not or whether it is worth applying?
    4. Will we get arrears of pension from the date of retirement or will the scheme be implemented prospectively?

    Thanking you in advance.

    Regards,
    NGS

  12. himanshu says:

    Hi Ma’am,
    If I select Yes to following question, its asking me to upload relevant documantry proof
    Question: Whether member is giving undertaking to deposit the contributions along with interest due till date of payment through his last employer [only when PF account has no/ insufficient balance]? *

    What should I upload?

    I am selecting yes cause in earlier question I have selected No, as I dont have balance in PF as I was retired 2 years ago.

      1. Renish R says:

        Question: Whether member is giving undertaking to deposit the contributions along with interest due till date of payment through his last employer [only when PF account has no/ insufficient balance]? *

        Select “ Yes” and upload Affidavit / Undertaking to deposit the contribution along with interest.

        For the above reply, Is there a standard form available for this or We need to Affidavit/ Undertaking on Rs.100/- NJSP ?

  13. Binoy Bhushan Sahay says:

    Madam,
    I worked with two psu organizations. The last psu , where I retired from, has issued letter in lieu of para 26(6). Whereas the previous psu has not issued any letter in lieu of 26(6) which I need to attach for filing the first point in the online Joint Option Form of EPFO Portal. In absence of 26(6) letter by my previous psu employer, can I attach previous psu PF statement of FY 2001-2002 alongwith my salary slips of May & June 2001 issued by my previous psu employer ? Will this work and safeguard my Joint Option Form from rejection ?
    High Regards.

  14. Sai Prakash says:

    CA Anita Bhadra,
    it is indeed commendable the effort to bring clarity on this topic. The form requires upload of an undertaking to deposit the contributions along with interest due, if the pensioner does not want to use accumulation available in his / her PF account. Is there a specific format for this Undertaking? Can it be a letter of undertaking from the pensioner, or does it need attestation by any Gazetted officers etc?
    thanks in advance

    1. ANITA BHADRA says:

      Letter of undertaking , duly attested / notarized is required to be uploaded.

      In case, you will not upload undertaking , chances are there not to process your application by EPFO site for further necessary action

  15. Nalini Jayanthi says:

    why confusing pensioners. when ammendment has clearly told no need for joint option.
    unnecessarily complicating and delaying.
    simply allow all for higher pension.
    EPFO to mention the contribution amount to be paid by individuals.
    Also, how pensioners can pay salary contribution. it’s illegal. So pensioners contribution to be paid or adjusted by Government and EPFO. people in service can pay from salary.

  16. Rajiv Bindage says:

    Hello Anita,

    1) I am retired in Feb 2020/58 years, however my last PF was contributed till sept 2021, will I get interest on PF for 3 years from Feb 2020 or from sept 2021 ?

    2) Mumbai PF office claims I will continue to get interest on PF till any date of withdrawal irrespective of 58 years retirement or 3 years from retirement although portal claims same, please advise as huge PF is accumulated.

    Rajiv
    Cell 9920684435
    rajiv.bindage@yahoo.com

    1. ANITA BHADRA says:

      You will continue getting interest only if your PF Account is not inoperative.

      After the retirement of the account holder, the EPFO will not pay interest if the account becomes inoperative.

      However, Interest earned on PF Account after retirement is taxable

  17. ASHWANI KUMARAWASTHI says:

    Madam Showing during uploading that special character space not allowed . Hw possible to up load Passbook and declaration form, please suggest and provide declaration format to meet uploading documents.
    I have started service from 01.04.1988 till 15.09.2006 company closed but service period transferred to Bharuch PF Commissioner which is not showing in my UAN details but in passbook showing service period showing. What we should do we can show only current employer.

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