High pension scheme epfo

Synopsis The Employees Provident Fund Organisation (EPFO) has issued a circular on December 29, 2022 on who can get higher pension and the process to apply for higher pension. The new circular is issued to comply with the instructions issued by the Supreme Court in its jdugement dated November 4, 2022. Hence, the following pensioners can apply for higher pension: a) The pensioners who as employees had contributed on salary exceeding the then prevalent wage ceiling of Rs 5,000 or Rs 6,500; and b) Exercised joint option under the Employees’ Pension Scheme ( c) Their exercise of such option was declined by the EPFO. Puneet Gupta, Tax Partner, People Advisory Services, EY India, says, "Employees who were members of the Employees’ Pension Scheme as on September 1, 2014 and did not opt for higher pension earlier should be eligible for higher pension as per Para 44(iv) of the Supreme Court ruling dated November 4, 2022. As per the ruling, such employees should opt for higher pension by March 3, 2023 (4 months from the ruling). However, the circular dated December 29, 2022 issued by the EPFO is silent on the procedure to be followed by such employees to avail higher pension benefit. It is likely that EPFO may issue different circular to provide instructions on how these employees can avail the higher pension benefit." • The employees who had retired prior to September 1, 2014, without exercising any option under paragraph 11(3) of the pre-amendment scheme have already exited from ...

EPFO Higher Pension Scheme: When it comes to personal financial planning, there are limited options available for retirement. However, the Employee Provident Fund Organisation (EPFO) offers a solution for retirement planning with the EPS scheme. Recently, the organisation has decided to provide Higher Pension Scheme under EPS. The last submission date was 03 May 2023 and has now been extended to 26 June 2023. Here is everything you need to know about the eligibility, benefits, and how you can apply for it. To know about the higher pension scheme of EPFO, click on this link 👇 What is EPS? EPS stands for Employees’ Pension Scheme and it is a retirement savings scheme that was introduced by the Indian Government for employees working in the organized sector. Under this scheme, both employees and employers make contributions to the employee’s retirement savings. According to EPFO “An employee shall cease to be the member of Pension Fund from the date of attaining 58 years of age or from the date of vesting admissible benefits under the Scheme.” The EPS was introduced in 1951. The organization states “The Employees' Provident Fund came into existence with the promulgation of the Employees' Provident Funds Ordinance on the 15th November, 1951. It was replaced by the Employees' Provident Funds Act, 1952.” What is Higher Pension Scheme? EPFO has recently announced the changes to Higher Pension Scheme under EPS. The web circular from EPFO states “(i) In respect of members who have ...

What the salary cap meant Since pensionable salary is capped at Rs 15,000 a month since Sept'14 for all EPS members, the 8.33% EPS share also remains capped & doesn't exceed Rs 1,250 per month. So, the entire 12% of the employer’s contribution over and above Rs 1,250 per month goes to the member’s EPF.

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...