Only those employees who were members of EPS 95 on or after September 1, 2014, are eligible for the higher pension. Moreover, only those employees who were contributing towards the employees’ provident fund (EPF) in higher proportion above the previous wage ceilings of Rs 5,000 and Rs 6,500 but could not opt for the higher contribution then can now apply for the higher pension.
All eligible EPS 95 members who wish to apply for the higher pension will have to make a higher contribution towards EPS 95 from the employer’s share on the basis of the actual wages till the time they remain active members of EPF or retire. However, a higher contribution from now onwards is not enough, as they will also have to pay the additional contributions for the previous years. This higher contribution for the previous years will be applicable from the time their actual wages went above the notified wage ceiling of Rs 5,000 and Rs 6,500 till the date the higher contribution starts getting deducted from the current salary or till retirement. This rule is applicable for employees who retired after September 1, 2014.
There is a lack of clarity about the calculation regarding how much deposit one has to make for missed contributions of the past. To clarify the issue, the current EPFO circular states: “The method of deposit and that of computation of pension will follow through subsequent circular.”
This is largely expected to be done by diverting the EPF balance to make up for the deficit for employees who have sufficient balance in their EPF account. “In case of share requiring adjustment from Provident Fund to Pension Fund and if any re-deposit to the fund, explicitly consent of the employee will be given in the joint option form,” stated the EPFO circular.
In case of transfer of funds from an exempted provident fund trust to the pension fund of EPFO, an undertaking of the trustee has to be submitted. The undertaking will be to make sure that due contribution, along with interest up to the date of payment, is deposited within the specified period.
In case of employees of unexempted establishments, refund of requisite employers’ share of contribution, the same will be deposited with interest at the rate declared under para 60 of the EPF Scheme of 1952 till the date of actual refund.Employees who have sufficient EPF balance will be able to easily divert the funds to clear the deficit of the past contributions. However, those who do not have sufficient balance or have lower balance due to withdrawals may have to make a deposit from their own pocket.
The manner in which such employees have to apply to the regional office concerned has been explained in the circular. For this, the employee and employer will have to apply jointly for higher deduction. The employee will need to provide all relevant proof related to their eligibility and the employer has to verify this. The commissioner will later specify the form and manner in which eligible employees should submit the request for higher contribution towards EPS. This joint option will contain the disclaimer and declaration which may be specified in the form.