EPFO members can now choose higher pension option

Employees' Provident Fund subscribers can now opt for higher pensions as the retirement fund body has issued a circular to all its regional offices to comply with the November 4 judgment of the Supreme Court.

The Supreme Court last year upheld the Employees Pension (Amendment) Scheme, 2014, which raised the pensionable salary cap to ₹15,000 a month from ₹6,500 per month and allowed members along with their employers to contribute 8.33% of their actual basic salaries (if it exceeded the cap) towards the Employee Pension Scheme (EPS).

The EPFO said that further details will be issued in subsequent circulars. "A facility will be provided for which URL (unique resource location) will be informed shortly. Once received, the regional PF commissioner shall put adequate notice on the notice board and banners for wider public information," the PF body stated.

"Employees and employers who had contributed on salary exceeding the prevalent wage ceiling of Rs 5,000 or Rs 6,500 per month and did not exercise the joint option and were members before September 1, 2014 and continued to be members would be able to use the joint option for higher pension," the EPFO said.

The Employee's Pension Scheme (EPS) was introduced in the year 1995 with the main aim of helping employees in the organised sector. The scheme, which is administered by the EPFO, provides employees a pension after they reach the age of 58. Both the employee and the employer contribute 12% of the employee's basic salary and dearness allowance (DA) to the EPF. While the employee's entire part goes to EPF, the employer's contribution goes to EPS at a rate of 8.33%.

Meanwhile, the retirement fund body added 14.93 lakh net members in the month of December, 2022. Out of 14.93 lakh members added during the month, around 8.02 lakh new members have come under the social security coverage of EPFO for the first time. Among the newly joined members, highest enrolment is registered in the age-group of 18-21 years with 2.39 lakh members, followed by the age-group of 22-25 years with 2.08 lakh members. The age-groups of 18-25 years constitute 55.64% of total new members during the month.

The data also highlights that approximately 3.84 lakh members exited while 10.74 lakh members exited and re-joined EPFO membership. These members switched their jobs and re-joined the establishments covered under EPFO and opted to transfer their accumulations instead of applying for final settlement.

Gender-wise analysis of payroll data indicates that enrolment of new female members has been 2.05 lakh in December. The percentage of new female members among the total new recruits increased from 25.14% in November 2022 to 25.57% in December.

State-wise payroll figures highlight that the top five states in terms of net member addition are Maharashtra, Tamil Nadu, Gujarat, Karnataka, Haryana. These states together added 60.08% of net member addition during the month.