Deadline for higher EPF pension benefits ends today: Details here
What's the story
The deadline to apply for a higher pension through the Employees' Pension Scheme (EPS) is July 11, i.e. today. However, there is still uncertainty surrounding certain matters, causing many individuals to hesitate in applying for the higher EPS option. With just a day remaining, subscribers must act swiftly to complete the process as soon as possible.
Deadline extensions
Deadline extended thrice, another extension unlikely
The deadline for employers to submit the high pension application has been extended not once, not twice, but thrice. First, it was pushed from March 3, 2023, to May 3, 2023. Then, it was extended to June 26, 2023. And now, the current and final deadline is set for July 11, 2023. It's quite unlikely that they will extend it again.
Eligibility
Who can apply?
Employees and employers who contributed on salaries above the wage ceiling of either Rs. 5,000 or Rs. 6,500 are eligible for this benefit. Those employees and employers who did not choose the joint option in the previous window, while being EPS members are also eligible. Employees who were members before September 1, 2014, and remained members thereafter are also eligible for the same.
Documents
Documents required
When filling out the online application form, make sure to have your Universal Account Number (UAN), Pension Payment Order (PPO) number for pensioners, and proof of payment made to the EPF account beyond the wage ceiling limit. These are some of the essential documents you will need to have at hand, to ensure a hassle-free and accurate form fill-up.
Steps
How to apply
To apply online, simply visit the Employees Provident Fund Organisation (EPFO) portal and follow the step-by-step instructions provided. Access the Member E-Sewa portal and select the "Pension on Higher Salary" option. Fill in the required information, including your UAN, Name, DOB, Aadhaar, mobile number, and captcha. Once completed, you will receive an Aadhaar-based authorization pin. Enter this pin to validate and submit your application.
Understanding the system
Here's how it is calculated
Currently, both employees and employers contribute 12% each of the basic salary and dearness allowance to the EPF. Of the employer's 12% contribution, 8.33% goes to EPS and 3.67% to EPF. Suppose an employee earns Rs. 20,000/month, the employer's contribution of 8.3%, which is Rs. 1,666, will be deposited into the pension account, while the remaining Rs. 734 will go into the EPF account.
Cap removed
What has changed?
Until now, there was a wage cap of Rs. 15,000 of which 8.33% share, or Rs. 1,249.50, went into the employer's EPS contribution, while the remaining money would be deposited into the EPF account. With the removal of the wage cap on EPS contribution, employees now have the option of contributing 8.33% of the total amount of basic and DA toward the pension scheme.
Opinion
Should you opt for EPF high pension?
Opting for the higher pension option will result in a reduction of your EPF balance, but it will correspondingly increase your pension amount. However, remember that by allocating more money to the EPF, you will have less cash available for immediate use. Nonetheless, if you can effectively manage your short- and medium-term financial goals with a lower salary, opt for a higher EPF contribution.