Epfo higher pension

The EPFO has released a circular in June 2023, which finally announces the new formula for computing pension on higher salary, instead of the existing statutory limits. That is, now we know what will EPFO use as pension calculation method to find our higher pension amount in 2023. The higher pension will be applicable to those who opt for ahigher pension on their actual salary instead of the current statutory limit of Rs 15,000 per month under the Employees Pension Scheme (EPS), 1995 or EPS95 scheme. So what is the exact pension calculation formula released by the Employees’ Provident Fund Organisation? As per the circular, the formula for the calculation of higher pension will be different for those retiring before 1st September 2014 and those retiring after the said date. • Pension Calculation Formula (If Retired BEFORE 1st September 2014) – If an employee retired before 1 st Sept 2014, i.e. his/her EPS pension started prior to the given date, then the higher pension formula and calculation will be based on the average monthly salary during the last 12 months preceding the date of retirement (or exit from the membership of the EPS pension fund). • Pension Calculation Formula (If Retired AFTER 1st September 2014) – If an employee retired after 1 st Sept 2014 or will retire in future, then the higher pension formula and calculation will instead be based on the average monthly salary during the last 60 months preceding the date of retirement (or exit from the membership of ...

EPFO Higher Pension Link (unifiedportal.mem-epfindia.gov.in) activated: Contributing to Employees Pension Scheme (EPS) from before 1 September 2014? You are now eligible to exercise the joint option for a higher pension provided by the Employees Provident Fund Organisation (EPFO). The higher pension application link is available on EPFO’s unified portal. The announcement of the higher pension option has resulted in a lot of confusion among EPFO subscribers as to whether they should go for this or not. While several reasons are there to Sukanya Samriddhi Yojana (SSY) account: Get Rs 16 lakh for your daughter by saving Rs 100/day Also Read: 2. Guaranteed monthly pension income We are living in a time when nothing is guaranteed. Even bank FDs have a deposit insurance guarantee of only Rs 5 lakh while many other savings schemes come with various deposit limits. Investing in market-linked products like stocks and mutual funds is subject to market risks and volatility. Moreover, there is an everyday hassle of managing your money. For post-retirement life, no one would like to go through the hassles of managing money. Hence, the EPFO’s higher pension option is a good opportunity that you should consider. 3. Your EPF corpus may decrease, so what? One argument against the higher pension option is that your Employees Provident Fund (EPF) corpus will decrease. If you have been contributing to EPFO above the pensionable salary cap of Rs 15,000 since before 1 September 2014, opting for...

Employees seeking a higher pension can now submit a joint declaration with the employer. The Employees’ Provident Fund Organisation (EPFO) has defined the process of applying for a higher pension under the Employee Pension Scheme (EPS). Notably, in November last year, the Supreme Court instructed the EPFO to make the higher pension option available to member employees. Also Read: Pension Calculation To calculate the pension, the pensionable salary must be multiplied by the pensionable service years and then divided by 70. Before the notification issued on 22 August 2014, the pensionable salary was simply the average salary of the last 12 months. With the notification, this definition was changed to “average salary of 60 months”. Although the change was challenged, the Supreme Court upheld the EPFO’s notification. A person with a minimum of ten years of contributory service is eligible for a pension. Also Read: The Higher Pension Scenario There are various factors and effects related to the higher pension plan scenario. With the change in regulation, if the subscriber’s salary increased in the last 12 months, the subscriber’s pensionable wage would be lower. In the reverse scenario, the pensionable salary would be high if there was a reduction in pay during the last 12 months. Once you choose a higher pension, your past contribution and interest will be added to the EPS, while your accumulated PF balance will get reduced. Once you choose a higher pension, your past contribu...

Employees Pension Scheme calculation At present, the government pays 1.16 per cent of basic wages of up to ₹15,000 (threshold basic wage) as subsidy for contributions towards Employees Pension Scheme (EPS). The employers contribute 12 per cent of basic wages towards social security schemes run by the EPFO. As much as 8.33 per cent out of the 12 per cent contributed by the employers goes into the EPS and the remaining 3.67 per cent is credited into the Employees Provident Fund. 1.16% additional contribution rule for higher EPS All those EPFO members who are opting to contribute on their actual basic wage which is higher than the threshold of ₹15,000 per month for getting a higher pension, will not have to contribute this additional 1.16 per cent towards EPS. Retirement fund body EPFO has extended the date for filing applications to opt for a higher pension till June 26, 2023. In order to provide a larger window of opportunity and in order to enable all eligible persons to file their applications, the timeline for filing applications would now be till 26th June, 2023, according to a statement. Should you opt for higher pension under the Employee Pension Scheme? According to Ravi Saraogi, Sebi registered investment adviser (RIA), opting for Higher EPFO pension: Why you should avoid going for it Amit Gupta, MD, SAG Infotech said your early retirement plan may get jeopardised if you choose Higher EPS pension. “For individuals who want to retire early, applying for EPFO's higher...

Synopsis ​​Higher EPS pension: The latest circular is applicable for an eligible employee who does not have proof of joint request/undertaking/permission for making a contribution to the EPF account on full/higher salary (for those where basic salary exceeded the wage limit). The circular is intended to provide the relief and ease the process of applying for higher pension from EPS. The circular, dated June 14, 2023, is applicable for an eligible employee who does not have proof of joint request/undertaking/permission (required for making a contribution to the EPF account on full/higher salary for those where basic salary exceeded the wage limit). In such cases, the EPFO field offices can accept higher pension applications as per the following procedure. Field offices are required to verify that: • Employer’s share of PF contribution has been remitted on employee’s pay exceeding the prevalent statutory wage ceiling of Rs 5000/Rs 6500/Rs 15000 per month from the day the pay exceeded the wage ceiling or Nov 16, 1995, whichever is later, till date/till the date of retirement or superannuation as the case may be AND • Administrative charges payable by the employer have been remitted on such higher wages AND • EPF account of employee has been updated with interest as per Para 60 of EPFS, 1952, on the basis of such contribution received. Along with the specified process, the field offices need to ensure that at least one of the following documents is submitted along with the joi...

EPFO Higher Pension Calculation 2023: If you are an EPF member from before 1st September 2014, you will soon have the option to contribute 8.33% of your Basic Salary and Dearness Allowance (if applicable) towards Employee Pension Scheme (EPS). More details about this option and an At present, an employee’s contribution towards the EPF account is capped at 12% of the Basic Pay+Dearness Allowance. An equal 12% contribution is made by the employer, of which 8.33% goes towards EPS and 3.67% towards the employee’s EPF account. The employer’s 8.33% contribution is subject to the statutory wage ceiling of Rs 15,000, which means only Rs 1250 (8.33% of Rs 15,000) goes to your EPS account every month. How much Gold jewellery you can keep at home without proof and how it is taxed Example: If Basic Pay is Rs 40,000 What is happening now: 12% of your Basic Pay (Rs 4800) goes to the EPF account every month. Of the employer’s contribution, which is also equal to 12% of your Basic Salary, Rs 1250 goes towards EPS while the remaining Rs 3550 goes to your EPF account. What will happen if you opt for the higher pension: As Supreme Court has said that employees will get a chance to opt for a higher EPS contribution based on actual pay, 8.33% of your Basic Pay, i.e. Rs 3332 can go towards EPS. But there is a catch here. If you opt for the higher pension option then the EPFO will retrospectively deduct the amount from your PF account towards EPS from your joining date or November 1, 1995, which...

Many believe that the higher pension scheme benefits individuals who want a higher monthly pension but do not require a huge lump sum payment upon retirement. But in hindsight, there's much more to it. ALSO READ | By selecting the higher pension option, your EPF balance will be reduced while your pension will increase. This can alleviate the need for extensive retirement planning on your part. Conversely, if you choose not to opt for a higher pension, you will have a significant EPF corpus, but the onus will be on you to develop a robust retirement plan. Every EPFO member has two accounts, the first being the Employee Provident Fund (EPF) and the second being the Employee Pension Scheme (EPS) where the pension amount is deposited. Every month, a 12 per cent amount is deducted from the employee's basic salary and DA and deposited in the EPF account. The same amount is deposited by his/her employer as well. However, it is important to understand that the employer's entire contribution does not go into the EPF account. Of the employer's 12 per cent contribution, 8.33 per cent goes into the EPF account while the remaining 3.67 per cent is credited into the EPS account. But if you choose the higher pension option, there is a change in the employer's contribution, which will be explained below. For better understanding, let's call the higher pension scheme "EPS-95" from here on. ALSO READ | WHAT IS EPS-95? In the interest of employees working in the private sector, the governmen...

The EPFO has released a circular in June 2023, which finally announces the new formula for computing pension on higher salary, instead of the existing statutory limits. That is, now we know what will EPFO use as pension calculation method to find our higher pension amount in 2023. The higher pension will be applicable to those who opt for ahigher pension on their actual salary instead of the current statutory limit of Rs 15,000 per month under the Employees Pension Scheme (EPS), 1995 or EPS95 scheme. So what is the exact pension calculation formula released by the Employees’ Provident Fund Organisation? As per the circular, the formula for the calculation of higher pension will be different for those retiring before 1st September 2014 and those retiring after the said date. • Pension Calculation Formula (If Retired BEFORE 1st September 2014) – If an employee retired before 1 st Sept 2014, i.e. his/her EPS pension started prior to the given date, then the higher pension formula and calculation will be based on the average monthly salary during the last 12 months preceding the date of retirement (or exit from the membership of the EPS pension fund). • Pension Calculation Formula (If Retired AFTER 1st September 2014) – If an employee retired after 1 st Sept 2014 or will retire in future, then the higher pension formula and calculation will instead be based on the average monthly salary during the last 60 months preceding the date of retirement (or exit from the membership of ...

Employees Pension Scheme calculation At present, the government pays 1.16 per cent of basic wages of up to ₹15,000 (threshold basic wage) as subsidy for contributions towards Employees Pension Scheme (EPS). The employers contribute 12 per cent of basic wages towards social security schemes run by the EPFO. As much as 8.33 per cent out of the 12 per cent contributed by the employers goes into the EPS and the remaining 3.67 per cent is credited into the Employees Provident Fund. 1.16% additional contribution rule for higher EPS All those EPFO members who are opting to contribute on their actual basic wage which is higher than the threshold of ₹15,000 per month for getting a higher pension, will not have to contribute this additional 1.16 per cent towards EPS. Retirement fund body EPFO has extended the date for filing applications to opt for a higher pension till June 26, 2023. In order to provide a larger window of opportunity and in order to enable all eligible persons to file their applications, the timeline for filing applications would now be till 26th June, 2023, according to a statement. Should you opt for higher pension under the Employee Pension Scheme? According to Ravi Saraogi, Sebi registered investment adviser (RIA), opting for Higher EPFO pension: Why you should avoid going for it Amit Gupta, MD, SAG Infotech said your early retirement plan may get jeopardised if you choose Higher EPS pension. “For individuals who want to retire early, applying for EPFO's higher...

EPFO Higher Pension Calculation 2023: If you are an EPF member from before 1st September 2014, you will soon have the option to contribute 8.33% of your Basic Salary and Dearness Allowance (if applicable) towards Employee Pension Scheme (EPS). More details about this option and an At present, an employee’s contribution towards the EPF account is capped at 12% of the Basic Pay+Dearness Allowance. An equal 12% contribution is made by the employer, of which 8.33% goes towards EPS and 3.67% towards the employee’s EPF account. The employer’s 8.33% contribution is subject to the statutory wage ceiling of Rs 15,000, which means only Rs 1250 (8.33% of Rs 15,000) goes to your EPS account every month. How much Gold jewellery you can keep at home without proof and how it is taxed Example: If Basic Pay is Rs 40,000 What is happening now: 12% of your Basic Pay (Rs 4800) goes to the EPF account every month. Of the employer’s contribution, which is also equal to 12% of your Basic Salary, Rs 1250 goes towards EPS while the remaining Rs 3550 goes to your EPF account. What will happen if you opt for the higher pension: As Supreme Court has said that employees will get a chance to opt for a higher EPS contribution based on actual pay, 8.33% of your Basic Pay, i.e. Rs 3332 can go towards EPS. But there is a catch here. If you opt for the higher pension option then the EPFO will retrospectively deduct the amount from your PF account towards EPS from your joining date or November 1, 1995, which...