Final Chance To Secure Higher EPS Pension: Deadline Extended To January 31, 2025

The Employees' Provident Fund Organisation (EPFO) has brought in the Higher EPS Pension Scheme, which entitles members to enhance retirement benefits by opting for the higher pension based on the actual wages rather than a statutory limit of Rs 6,500 prior to 1 September 2014 or Rs 15,000 post-1 September 2014. To address the challenges and tardiness, EPFO further extended the deadline for employers to upload wage particulars till January 31, 2025, which is the very last cut-off date.

This is aimed at providing employees with a better retirement income as aligned with their contribution while working. Though extended several times, it continues to delay, and today it has over 3.1 lakh applications awaiting validation, and over 4.66 lakh cases seeking further information. The latest extension given by EPFO allows both employers and employees adequate time to complete the necessary process.

Also Read: No Plan To Change Fixed Medical Allowance For Pensioners Not Availing CGHS, Says Health Ministry

Understanding the Higher EPS Pension Scheme

This Higher EPS Pension Scheme will permit eligible EPF members to contribute towards a higher pension by basing contributions on actual wages rather than the prescribed caps. This change ensures a higher monthly pension and is attractive to individuals earning higher salaries.

The scheme has a benefit to employees because it ensures that the retirement income is proportionate to the contribution and earnings of the employee. For instance, under the traditional scheme, the contributions were limited by the specific wage limit such that there was a capping on the final pension amount. The elimination of this limitation enables the Higher EPS Pension Scheme to prepare the employees with more sustainable post-retirement financial capability.

Eligibility to Higher EPS Pension

Eligibility for the scheme has been defined by specific criteria such as:

Employees who, on August 31, 2014, had been members of the EPF are eligible to get a higher pension. A new provision has been established for those employees who are active members on August 31, 2014. Other than this criterion, an employee must have a minimum of 10 years of service to get a chance to join this scheme.

The scheme requires that a declaration be signed jointly by the employee and the employer. The joint declaration ensures that both agree to have pension contributions determined by actual wages. Note also that regular pension begins at age 58, with the option to start earlier at age 50. But this will result in proportionate reduction in the payouts.

Determining the Greater Pension Amount

The formula for the monthly pension amount is:

Monthly Pension = Pensionable Salary × Pensionable Service ÷ 70

Here, pensionable salary refers to the average basic salary received over the last 60 months of service. During those times prior to 1 September 2014, the cap was placed on salary at Rs 6,500, but subsequently went up to Rs 15,000 for the later dates, i.e. from 2014 onwards. In any case under the higher EPS Pension Scheme, one may avail himself of actual wages; that is his pension is rather higher under the new scheme than before.

This is described as the years one puts in pensionable service within the EPS. Combining actual salary with the total service period ensures that the scheme pays the retirement benefits to people with longer periods of service and higher wage levels.

Deadline and Challenges

The EPFO has faced much hassle in the process of implementing the scheme, particularly regarding processing and validating applications. The deadline set for uploading wage particulars by employers was initially placed on September 30, 2023. The due date was further extended; it was moved to December 31, 2023, then to May 31, 2024, and is now on January 31, 2025.

The new extensions notwithstanding, over 3.1 lakh applications continue to wait for validation. Over 4.66 lakh cases are also awaiting clarification or information from EPFO sought from employers. In this context, EPFO has advised employers to respond to all pending queries by January 15, 2025, thereby ensuring that the application suffers no further delay in getting processed.

The extension is to be made easier and more accessible to all the stakeholders so that they get enough time to complete their respective tasks. However, the EPFO has clarified that this extension will be the final opportunity for compliance, thus making it urgent to complete the pending tasks.

Benefits of Choosing the Scheme

The Higher EPS Pension Scheme gives many advantages to the employees who qualify for it. Since the contributions are based on wages, then the pension achieved is relatively higher and will, consequently, have a better quality of life post-retirement. Also, the payout of pension will be career-earned, therefore reducing the difference between pre-retirement and post-retirement income.

This also removes the longstanding inadequacies in the EPS by removing salary caps, which previously capped contributions. Consequently, this will ensure people earning higher salaries receive pension values corresponding to their respective contributions.

To the employer, this scheme ensures them in showing support for their retirement savings.

Follow Up on Your Application Status

One can easily track the status of an application for Higher EPS Pension filed by an employee pensioner or pensioners through the EPFO Member Sewa portal. To track the status of your application in detail, please follow the step-by-step process below:

1. Open Portal: Visit https://unifiedportal-mem.epfindia.gov.in/memberInterfacePohw/

2. Choose Track: click on the link which reads 'Track Status of EPS Higher Pension Applications'.

3. Feed Details: Feed in the Acknowledgement Number along with any other information requested.

4. Consent: Tick the check box for Aadhaar-based authentication.

5. Enter OTP: An OTP will be sent to your Aadhaar-linked mobile number. Just enter the OTP to complete the process.

Opportunity for Employers and Employees at Last

The EPFO has declared this as the last opportunity for employers to validate and upload wage details of employees who have opted for the Higher EPS Pension Scheme. The deadline is January 31, 2025, and it is believed that employers will speed up the process so that there is no further delay.

The opportunity for the employees to be certain that their applications have been made and are perfect in time can be crucial. It might be late if mistakes or delays appear for the chance to become more beneficial. 

Why the Higher EPS Pension Scheme Matters

The higher EPS pension scheme would be one big move in securing retirement benefits for the employees. Allowing the pension payout to be aligned with actual earnings provides an accurate and more equitable basis for computing retirement benefits.

The Higher EPS Pension Scheme can be an opportunity for EPF members to upgrade their retirement benefits. They can secure a pension that truly reflects their career earnings by choosing contributions based on actual wages.

While the extension to January 31, 2025, gives them more time to comply, both the employers and employees should not delay any further to process the said steps.