1. The EPFO vide Circular dated 29 Dec 2022 lays down the eligibility criteria for employees seeking higher pensions under EPS 95 Scheme. The circular is issued to comply with the Supreme Court’s direction vide judgment pronounced on 04.11.2022
2. Para 44(ix) of the said judgment stipulated that the fund authorities shall implement the directives contained in the judgment within eight weeks. The timeline was to end on 03.01.2023 and that is the reason, partial guidelines have been hastily issued by the EPFO.
3. The guidelines issued by EPFO vide circular dated 29.12.2022 is silent on the procedure to be followed by the serving members to avail of higher pension benefit whereas Para 44(iv) of the Supreme Court ruling clearly stated that the members who did not opt for higher pension as on 01.09.2014 should exercise option for higher pension within 4 months from the ruling (by March 03, 2023).
Also Read: EPS -95- Eligibility For Higher Pension – Part-II
EPS 95 – Higher Pension Vs EPF – Comparative Analysis
4 Another circular is expected from EPFO to provide guidelines on how these employees can avail of higher pension benefits.
BACKGROUND
5.1 The Employees’ Provident Fund and Miscellaneous Provisions Act were promulgated in the year 1952.
5.2 As per section 2(f) of PF Act 1952, Employees whose ‘pay’ was more than Rs 6500/- were considered as excluded employees and not eligible to be a member of the EPF Scheme.
5.3 However, section 26(6) of the Act allows them to be a member of the EPF scheme at the joint request of the employee and employer of the establishment.
5.4 In the year 1995, the pension scheme was conceived by way of the introduction of Section 6A to the EPF Act. Under the said scheme, the employer’s contribution of 8.33 % was required to be diverted to the pension scheme.
5.5 The EPS Scheme 95 restricted the maximum monthly pensionable salary as Rs 6500/- It means out of the employer’s contribution, 8.33% of Rs 6500/- only will be diverted to the pension fund.
Illustration: Mr. Anupam’s monthly salary is Rs 10000/-. Employer’s contribution towards PF is Rs 1200 (12% of Rs 10000). Salary for the purpose of EPS will be Rs 6500/- and thus Rs 542 / (8.33% of 6500/) will only be diverted to the Pension Scheme and the balance of Rs 658/- will be credited to his PF Account towards the employer’s PF contribution.
First Option for Higher Pension In March 1996, the proviso was added to paragraph 11(3) of the scheme giving the employer and employee an option to contribute a percentage of the actual salary (i.e. not necessarily up to Rs 6,500).
7.1 As per the Proviso to Para 11(3) of the scheme – If at the option of employer and employee, 8.33% of the employer’s contribution on actual salary (higher than Rs 6500) is remitted into the pension fund, such higher salary shall be considered as pensionable salary.
7.2 There were certain restrictions as regards the time for exercising such option as it was mentioned in 11(3) proviso that option is required to be exercised from the date of commencement of the scheme or the date salary exceeds Rs 6500/-, whichever is later.
7.3 A set of employees had approached the provident fund authorities much beyond such a perceived specified date, mostly on the eve of their retirement, seeking to be included in the higher pension scheme. The point urged by them was that the amendment of 1996 was not within their knowledge, the same not having been widely publicized.
ILLUSTRATION: In the Illustration above, Mr. Anupam was not aware of the proviso added in March 96 and not exercised the option for contributing pension on actual salary i.e. His employer continued remitting Rs 542 (8.33 % on Rs 6500) instead of Rs 833 (8.33% on Rs 10000).
8.1 A set of employees approached the PF Authorities for exercising options toward a higher pension.
9. The provident fund authorities had rejected their plea. According to the authorities, that was the cut-off limit.
9.1 Now, EPFO vide circular dated 29.12.2022 is allowing only those set of members who approached the authorities and their plea was rejected by EPFO
The matter ultimately went to Supreme Court and in the case of R.C. Gupta (supra). It was held that the dates or time limits specified in clause 11(3) of the pension scheme were not cut-off dates. The said time limit determined the eligibility of the employer and employee to exercise their option under the proviso of 11(3) and not the cut-off time.
10.1 It was also observed in this judgment that a beneficial scheme ought not to be allowed to be defeated by reference to a cut-off date in a situation where the employer was not following the ceiling limit of Rs 6500 and deposited 12% of the actual salary.
Second Option for Higher Pension On September 1, 2014, the EPFO amended the Scheme to increase the limit of pensionable salary to Rs 15000/-per month. Para 11(4) of the amendment scheme stipulated that a fresh option to be exercised jointly by the employer and employee continue to contribute on salary exceeding fifteen thousand rupees per month and the pensionable salary for the existing members who prefer such fresh option shall be based on the higher salary.
11.1 The second proviso to Paragraph 11 of the amended scheme specifies that the fresh option shall be exercised by the member within six months from the 1st day of September 2014.
11.2 Further, the fourth proviso to paragraph 11 specifies that if no option is exercised by the member within such period, it shall be deemed that the member has not opted for contribution over the wage ceiling and the contribution to the pension fund made over the wage ceiling in respect of such member shall be diverted to the Provident Fund along with interest.
A Division Bench of the Kerala High Court in its judgment delivered on 12th October 2018 set aside the Employees’ Pension Amendment (Scheme), 2014. The Delhi High Court
followed the view expressed by the Kerala High Court and quashed a circular issued by the provident fund authorities on 31st May 2017 precluding exempted establishments from the benefits of higher pension. A Division Bench of the Rajasthan High Court also expressed the same opinion. 54 writs petitions have been filed by the employees themselves or on their behalf under Article 32 of the Constitution of India seeking invalidation of the notification dated 22nd August 2014
Supreme Court Judgement dated 04.11.2022 A review petition was heard by the Supreme Court. Finally, on November 4, 2022, a three-Judge bench at the Supreme Court passed its judgment in the case of the Employees’ Provident Funds Organisation (EPFO) & ANR., etc. vs. Sunil Kumar B. & ORS, etc.
The relevant points of the said judgment applicable to employees’ eligibility for higher pension are brought out in the succeeding Paragraphs
14.1 The Court said that all employees who did not exercise the option but were entitled to do so due to the interpretation of the cut-off date by authorities should get a further four months to do so from the date of the order.
14.2 The implication is that those who were members of EPS-1995 as of September 1, 2014, and beyond could exercise the joint option (first and second option). This means that serving employees can now opt for a higher pension, transferring the stipulated part of the employer’s contribution to the pension fund.
14.3 Other members who contributed to the fund beyond that date but retired, would have to remit the stipulated dues into the pension fund of the EPFO.
14.4 The court specifically excluded those who retired before September 1, 2014, without exercising the joint option in the unamended scheme, since they had already exited the membership.
Exempted Establishment: The bench of Chief Justice of India U.U. Lalit, Aniruddha Bose, and Sudhanshu Dhulia directed that the amended scheme of 2014 would apply to employees of exempted establishments, which are those allowed by law to maintain their contributions in Provident Fund Trusts rather than with the PF authorities.
14.1 They must now give an undertaking along with the joint option, to transfer the stipulated employer’s contribution, matching the quantum that would have been due for transfer for accounts maintained by PF authorities.
15 Conclusion: The EPFO circular remains silent on many other issues arising from the November Supreme Court judgment. The pensioners are hoping that further circulars/clarifications from the body will offer some guidance on the above-mentioned aspects.
Disclaimer: The article is for information purposes only
The author can be approached at caanitabhadra@gmail.com
Author Bio
Dear madam
I am prafull mahajan from Dombivli. My father was retired in March 2008.He get RS. 1580 pension and he was died on 23/08/2021 my mother get RS. 1000 pension.my mother get higher pension?
Mam, i have withdrawn my PF and Pension in 2016 while relieving from Company A. Now, i have started to work for another company from 2016 with new UAN. Am i eligible to opt for EPS scheme again?
I have ritired on july2012, an employee of PVT LTD company, having employer’s own Trust and getting pension from the employer end, have an Annuity no. as identification of pensioner. will I be eligible for higher pension
No
Hello madam,
i heard from someone that if we have withdrawn partial amount also from PF at any point of time, those were not eligible for this high pension scheme. Is this correct? I’m a member of EPF from 2003. will I be eligible for this?
This is not correct. If you do not have sufficient balance in EPF Account, you need to give undertaking that the insufficient amount will be deposited through the employer .
You are eligible for EPS higher pension( if not retired before Sep 2014)
Good to understand the guidlines.
I worked in different companies and not transfedred PF account to one UAN. your company will help to us for filing all the documents to avoid rejections.
Request to provide the consultant service to the middle class employees.
Regards,
Ananda
Madam, My heartfelt gratitude to you for such an informative and educative article on ‘Higher Pension’.
My Query: Am I eligible for Higher Pension?
My Facts:
Date of Birth: 16/02/1956
Completion of 58 Years on 15/02/2014 [Therefore, monthly pension on Pensionable salary of 6500 started and the EPS contributions ceased from this time.]
Date of Joining Service covered under EPFO: 14/11/2002
Date of Retirement from the Service: 28/02/2021 [As retirement age in my organization is 65 years.]
RIGHT FROM DAY ONE OF JOINING THE SERVICE TILL THE DATE OF RETIREMENT, BOTH THE EMPLOYER AND EMPLOYEE HAVE CONTRIBUTED 12% OF BASIC+DA.
Thank you sir for your humble comment.
For EPS scheme, the retirement age is to be considered 58 years only.
Since you have completed 58 years before Sep 2014, not eligible for higher pension.
Sir, good to know that the article helped you to understand the guidelines.
I do not have any company that provides consultancy services.
I am a normal employee working with PSU.
I will certainly help by sharing whatever limited knowledge available with me.
Please feel free and share your query
Sir, good to know that the article helped you to understand the guidelines.
I do not have any company that provides consultancy services.
I am a normal employee working with PSU.
I will certainly help by sharing whatever limited knowledge available with me.
Please feel free and share your query
Whether the RPFO directly transfer the amount from my employer’s contribution to the higher pension when I submit my application before 3rd May, 2023 or they consent my permission before transferring the amount to higher pension?
The employer will transfer the amount. By submitting the form after accepting the declaration given in online form – consent is already being given by the employee.
madam I was retired in 2016. I am getting pension now. can I go for high pension scheme. now company was closed
yes, if attained the age of 58 years after Sep 2014
My basis salary on 1st sep 2014 was less than 15000 but i am part of EPS, Am i eligible for opting higher pension scheme?
Yes
Hello Maam, My father worked in a State Cooperative Bank and was expired on 2010, before retirement age…. My mother gets epfo pension amount of Rs 2051/-. Will she is eligible for higher pension scheme?
Yes , If the retirement due date was after Sep 2014
retired on 224th Dec 2010. am I eligible for Higher pension
No
Dear Madam,
We have contributed 8.33 % to EPS scheme from 2014 for Rs 6500= 542/- and it was increased as per PF wage limit 15000/- but we have not contributed to EPS scheme more than the PF Wage limit can we go for higher pension scheme
Yes, You can go for higher pension scheme.
MYSELF ATTAINED AGE 58 YEARS ON 01/09/2020 IN A PRIVATE ORGANISATION. MY BASIC+DA IS MORE THAN RS.15000/-. BUT DEDUCTED ON rs.15000/- ONLY FOR PROVIDENT FUND AND PENSION ALSO. PRIOR TO THIS WORKED IN DIFFERENT PVT ORGANISATIONS. IN THE ORGANISATIONS ALSO THEY CONTRIBUTED SAME ONLY. WITHDRAWN THE BOTH SHARES OF PF ACCUMULATIONS. DUE TO SERVICE ISSUE NOT YET APPROVED PENSION. AM I ELIGIBLE FOR HIGHER PENSION. PLEASE CLARIFY.
If PF itself is deducted on Rs 15000/- , you are not eligible for higher pension.
I work with Private university since 2011 and I am getting salary slip with Basic + DA more than 1 lac per month. But my PF is deducted @ Rs 1800 per month (2350 is deposited in my UAN PF account which includes University PF contribution also). University may be depositing 1250 per month towards EPS. I am going to retire on 31st May 2023. Can I opt for new EPS scheme with higher pension by transferring balance requisite amount from my PF balance which is approx. 6.5 lacs at present
8.33% of the employer’s share of PF contribution goes towards pension.
Since you are still in service, approach your employer. He will transfer the amount to EPS.
Joint option form is required to be submitted to EPFO for this purpose.
I have 12 years of Pensional service and retired in Oct 2016. My Last Basic Salary is about 130000/- and PF deduction was more than 8.33%. Where as I am now getting pension of Rs 1226/- If I opt for higher pension what would be my new pension and how much i need to deposit back to EPF pl?
I been appointed under state road transport corporation on 25.01.2018. Am I eligible for Higher pension?
To the best of my limited knowledge , EPS-95 scheme is not applicable on Central & State Govt employees
Hi sir I joined eps 1995 scheme when I started my first job in 2013. Now suppose my basic is 50000/- but my employer is contributing 1250/- and I want to opt for higher pension. Am I eligible and how to apply and inform my employer on this
Yes
you are eligible.
Reference articles on Tax Guru for procedures & further details.
mam, thanks a lot for your advice, I am confused here because my father took voluntary retirement in 1993, you said he is eligible for eps 95, I have read two queries where you have said that who have retired before September 2014 is not eligible for pension. please clarify.
Members retired b4 Sep 2014 are not eligible.
Sorry , if I missed the date of VRS for replying yr query .
It is re-confirmed here that members retired b4 Sep 2014 are not eligible
I retired in March 2020. I am opting for the higher pension however would like to know approx what percentage of my PF i will need to return to get the pension.
Calculation varies with employee’s Basic+DA , increment rate and promotion etc.
I retired in March 2020. received my PF and gratuity. now would like to opt for the higher pension. my question is that what percentage of my PF will i need to return in order to get the pension. Even an approximate idea will do.
It varies depending on salary , increment rate & promotion from date of joining date.
Few cases , it is as high as 75% of PF corpus to be transferred towards pension.
Madam. A very good article.
please clarify
a) how actual salary (₹26496009) has been derived.
b) I started service from September 95 . Till 2004 my basic salary was below 6500 & EPS was calculated on my actual basic. From Aug 2004 basic exceeds 6500 & my EPS was calculated on 6500/- i. e. 541/- & after 2014 it’s 1250/-. Now, if I opt for pension on higher salary, then 8.33℅ of higher basic ( over 6500 or 15000) which I have to pay to EPFO, shall be computed from Aug 2004.
c) how EPFO will calculate 8.33℅ of higher basic for individual employees. Whether they will calculate the same month wise or take a percentage of PF accumulation.
kindly advice.
The month wise calculation will be done by the employer. For methodology to calculate differential amount please Refer article :https://taxguru.in/corporate-law/eps-95-higher-pension-frequently-asked-questions.html
19.02.2023
1. Whether EPFO will modify formula for pension? i.e. reduce maximum pensionable service years etc.
2. Whether EPFO bring any limit on maximum payable pension amount?
or modify any provisions as on today, As section 7 of EPF act states regarding modification in pension scheme.
As decision will be made according to todays conditions will there be again option to exit the scheme if not beneficial in future?
These are the questions in everybody’s mind and answers can be given only by the EPFO or the Government in near future
Thank you very much mam for your reply.
Your articles are simplifying the process of understanding of current scenario to common people. Also it will help many to take correct decisions for future.
What is pensionable service in EPS ? If one join in the year 1990 & going to retire in 2023 is the pensionable service considered 33+2 years or 28+2 years?
It will be 28+2
Pensionable service will be considered from Nov 1995
Dear Madam,
All your three articles are well explained the concept of EPS 95. I have one doubt, I have joined State Electricity Board in July 2017, am I eligible to exercise option and opt for higher pension benefits under EPS 95.
Thanks for humble comment.
No, in case your Salary ( Basic+DA) is more than Rs 15000/-& joined the service after 2014, you are not a member of the EPS scheme and hence not eligible for a higher pension.
Dear Mam,
There are some employees in our organisation, who joined after 2014 and having basic+DA more than 15000, but Rs.1250 are being sent to EPS from their PF account through employers share.
How this is possible, if they are not eligible for being the EPS member?
They all are eligible for higher pension. Joint option form will be submitted by such employees.
The balance amount of EPS on actual salary will be diverted from employer share of EPF to EPS Account/( by the employer )and they will be eligible for higher pension on retirement.
Dear Madam,
Tganking you for providing very good explanation on the decision given by honorable Supreme Court.
We will be grateful if you kindly provide your valuable guidance also with example of application or Form (provided if any) in this regard for applying for higher Pension by a retired employee after 2014 who has already withdraw his PF amount.
Regards,
Thanks for your humble comment.
The form for higher pension is the same for existing and retired employees. EPFO has not issued any standard Form for this purpose. The organizations are issuing their own Joint Option Form. These are available on Google or else I will share the form issued by one of such organization
I have joined my company in 1991 and will be retiring in 2028. My Employer is trust and manages the PF with themselves which as per understanding is an exempted institution.
My employer seems to be least bother with this matter but I want to opt in for higher pension. How should I proceed. Also I’ve 2 questions.
1) My employer never deducted on actual salary but on ceiling limit as known to everyone. Am i eligible?
2) what is last date to opt in as read 15th Feb 2023 somewhere? will format of Annexure A & B by other companies will help?
Since the joint option form is a must for exercising the option, you need to get it attested by your employer.
If the PF amount itself is not deducted from your actual salary, then you are not eligible. Instead, if the employer remitted the pension amount on the ceiling limit (out of the employer’s contribution of 12%), you are eligible to opt.
The last date to opt is 4th March 2023
Format of Annexures A & B by other companies will help.
Hello mam
If Husband and wife both are government employees. and I availed EPS 95 scheme.
so, I asked that after my passed wife can eligible for 50% pensions while she working or retired
Yes, the spouse will get a 50% pension even if he/she is a Government employee.
respected mam, i read your all 3 articles on eps, all r very clear and easy to understand,
1. pls elaborate more about the exempted establishments wrt EPFO and EPS.
2. PLS TELL WHETATHER the EPS pension will be given by exempted establishments or by EPS
REGARDS
Sir
In exempted Establishments , PF is being managed by Trust
Pension is to be paid by EPFO ( Pension Department ) only and not by the trust.
Nice article and explanation Anita Madam.
Please update us through next article on the examples
Thanks
2 more article with example are already there on Tax Guru- dated 07.02.2023
Mam,
My father was an employee of pgcil, he completed 58 years in May 2017, and his service was extended by 2 years and he retired in May 2019.
Unfortunately he passed away in April 2022, I wanted to know how can my mother avail this, will she get the whole pension amount or half the amount.
Please approach employer for joint option .
She is entitled for half pension
Hi. I am going to retire in the month of April ,2023. Do I have to submit joint option to get higher pension. I joined my company in 1986. Pl guide me what I need to do to get higher pension. Thanks. Vk
You have to submit joint option form to get higher pension
Yes , you need to submit joint option .
Fill up the form , get attested from employer and wait for EPFO guidelines for uploading on portal
those employee whose pf was deducted at celling limit of 6500 and 15000 and deposited accordingly and who retired after 2015 can opt for higher pension by giving differential amount from themselves or not. it is the case that employer did not deduct pf at full salary which was higher than limit. no body is answering.
Employer was not required to deduct PF at higher salary but he was to divert 8.33% of actual salary ( Basic+DA) out of employer’s contribution of 12% .
Instead , he had remitted 12% of Rs 6500/15000
Very good explanation and analysis
Thank you Sir for your humble comment.
EPFO ,circular dated 29-12-22,denies higher pension t for pre Retirees of 1-9-2014.
Supreme court judgement dated 4-10-2016,in R.C.Guptha case allows option on higher salary.
Supreme court order dated 4-11-22,retriates R.C.Guptha judgement and agrees and not set aside the judgement or modified it.
The circular dated 23-3-2017,by EPFO for asking to exercise option for higher salary is also not set aside, except circular dated 31-5-2017,excluding exemted establishments.
As far as member’s of FPS scheme are compulsorily brought in to EPS PENSION SCHEME.Hence the question of not exercising option for such people doesn’t arise.We have not exercised any option.
Under the above the circular issued by EPFO dated 29-12-22,is not contrary to R.C.Guptha case,and it’s own Circular dated 29-12-22
please clarify.
Yes Sir
Agreed . Your analysis is absolutely correct.
I am going to complete 58 year on August
2023.I want to calculate my EPS pension,so
pleasee tell me the formula as per new guidelines
There is no change in formula under new guidelines. The only difference is pensionable salary . So far , maximum amount diverted out of employers PF Contribution is Rs 1250 ( 8.33% of Rs 15000) . Pensionable salary with effect from 01.09.2014 is Rs 15000/-pm whereas as per new guidelines – it shall be actual salary.
The formula is
(Pensionable service + 2 * average ( actual ) salary ( Basic+DA) of last 5 years )/70
+ 2 is applicable if your service is more than 20 years .
I retired on 31.3.2013 and my last salary 70000 am I eligible for higher epf pension
In case , you had submitted joint option of employer and employee to the Authorities indicating that you wish to divert fund from EPF to Pension fund on actual salary , you are eligible for pension on actual salary . Otherwise not eligible.
Supreme Court Judgement vide judgement dated 04.11.2022 clearly indicated that the employees retired before 2014 without exercising option are not entitled .
I retired on 31.3.2013 and my last salary 70000,Am I eligible for higher pension
Employees retired before 2014 are not eligible for higher pension
Retired 2019 @60 age eligable to higher epf pension
As per a recent Supreme Court Judgment dated 04.11.2022, all the members are eligible except those who retired prior to 2014 without exercising joint option
i retired jun 2020 and my last drawn salary was 70k. can i opt for higher pension. high court pronounced four months time for those who have not opted during 2014
You are very much eligible to opt for higher pension as per Supreme Court Judgment dated 04.11.2022
Since EPFO has not yet issue guidelines for members retired after 2014 and the last day is fast approaching , it is advisable to submit joint option to EPFO Department( without waiting for guidelines to be issued by them)
I retired from HP State Pollution Control Board Shimla in April 2015 after attaining 58 years of age. Would I be eligible for a higher pension?
I also saw that the EPFO has made a portal for people who retired before 01.09.2014 but nothing is available online for us yet. I also went to my local EPFO office and they say they haven’t been notified about any judgment. Please link/create a post on how we should apply and if EPFO will make a portal for us.
Thank you!
You are eligible for higher pension . At present , EPFO vide circular dated 29.12.2022 clarified : -only those members who had applied earlier and rejected by EPFO can now give joint application for higher pension.
1. in 1995 , pensionable salary was last average of last 12 month.
when the deduction was on fixed amount say 5000/6500/15000 , how average of 12 month will apply.
2. was there any change in pension calculation formula any time. why and was it one sided decision of epfo.
As per Act , in 1995 , it was average salary of last 12 months ( later on amended to average salary of 60 months i’e 5 years w.e.f 2014)
No changes in formula to calculate pension, only the criteria amended to 5 years instead of 1 year of average salary
I retired in the year March 2012 and worked for in a LTD Company my PF was maintained by the company trustee & paid PF @ 12% on Rs. 6500/-
Am I eligible for higher pension.
As per Supreme Court Order dated 04.11.2022 , the members who retired prior to 01.09.2014 and had not opted for higher pension are not eligible to give joint option now and thus not eligible for higher pension.
I Retired in Sept 2015 after attaining 60 years. At that time my Basic was 60000/- 12 % PF was deducted on total salary
Am i eligible for higher pension
Please clarify
Yes , You are eligible subject to joint declaration by you and employer within prescribed time
Thanks for detailed explanation.
Can you please write another article with example salary ranges and expected higher EPS pension vis-a-vis original pension?
Thanks
Certainly , I will do that.
Will Pensionable salary for pension calculation based on last 60 months average salary or it will be on pro-rata basis from 1995 to retirement month as being calculated by EPFO currently?