What Do The Revised FAQs From EPFO Say About Higher Pension?

The Employees Provident Fund Organisation (EPFO) has revised the FAQs that Say About Higher Pension as the deadline to complete the employers’ formalities ends on December 31, 2023. The process for the employees opting for higher pensions closed on July 11, 2023. The EPFO, however, extended it till December 31 for employers. The updated FAQs From EPFO offer more clarity on the process, such as documents required from employees and employers or how to make a joint request for higher pensions. It is an upgraded version of the FAQ issued in June this year in line with the Supreme Court’s November 2022 order directing EPFO to publish an FAQ for pensioners applying for higher pensions. EPFO’s revised rules have retained the same calculation for higher pensions under EPS’95. Here are the key rules: Documentary Proof: In case of filing an online application for joint option validation, if the documentary proofs are not submitted under para 26 (6) of the EPF scheme, 1952, the Regional Provident Fund Commissioner (RPFC) cannot reject the application for the lack of documents if it is otherwise eligible. RPFC would instead obtain the necessary documents from the employer to ascertain the contributions for higher pension and eligibility.  Calculation of Pensionable Salary: The computation of the pensionable salary depends on the pension commencement date. 

• Pension commencement date before 01.09.2014: If the pension commencement date is before September 1, 2014, the pension will be calculated based on the 12 months' average salary during the contributory 12 months preceding the exit date from the pension fund. 
• Pension commencement date on or after 01.09.2014: In case the pension commencement date is on or after September 1, 2014, the pensionable salary will be calculated based on the average monthly pay during 60 months of contributory service preceding the date of exit from the scheme (EPF fund). 

 Retirement In The Future: For someone retiring in the future, the pension will be calculated depending on the provisions existing at the time of the pension commencement date. For someone retiring in 2030, the FAQ says, “The pension will be calculated based on the provisions of EPS, 1995 that will exist as of the date of the commencement of the pension.”  Arrears: While EPFO requires the employees to pay the difference in amount towards higher pension, queries were raised about whether pension arrears could be adjusted against it. According to the EPFO, “Arrears of pension will be paid to the pensioners in accordance with the existing process to comply with income tax provisions relating to TDS.”