Under the scheme, there is a provision to give 50 percent of the average basic salary received in the 12 months before retirement as a guaranteed pension. This notification follows the UPS notification issued by the government on January 24, 2025 for central government employees covered under the National Pension System (NPS).
UPS rules will be applicable from 1 April

PFRDA said in a statement that the rules related to UPS will come into force from April 1, 2025. These rules enable the enrollment of Central Government employees, including employees coming under NPS of existing Central Government in service as on April 1, 2025 and employees recruited in Central Government services on or after April 2025. The enrollment and claim forms for all these categories of Central Government employees will be available online on the website of Protein CRA from April 1, 2025.

Employees also have the option of submitting the form physically. According to the notification, the UPS or assured pay option will not be available in case the employee is removed or terminated from service or resigns. The notification said the rate of full assured pay will be 50 per cent of the average basic pay of 12 months immediately preceding retirement and subject to a minimum qualifying service of 25 years.

There will be an option to choose UPS and NPS

The notification will give 23 lakh government employees the option to choose between UPS and NPS. NPS came into effect on January 1, 2004. The Union Cabinet had approved the introduction of UPS on August 24, 2024. Under the Old Pension Scheme (OPS) effective before January 2004, employees used to get 50 per cent of their last basic salary of their tenure as pension.

Unlike OPS, UPS is contributory in nature. Employees have to contribute 10 per cent of their basic salary and dearness allowance, while the employer (central government) contributes 18.5 per cent. However, the final payout depends on the market returns on the funds, which are mostly invested in government bonds.

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Its purpose is to provide more benefits to the employees on retirement. Employees who take care of more pension or fund after retirement will be given an opportunity to contribute more to PF. This will eliminate the limit of 12 percent contribution.

A senior official of the Labour Ministry said that the aim of this reform is to provide more pension and funds to the employees after retirement. Therefore, there is a consideration to abolish the limit of 12 percent contribution in the investment option. Currently, both the employer and the employee have to contribute 12-12 percent of the basic salary. The Employees Provident Fund Organization (EPFO) is now considering abolishing the limit of 12 percent in this system.

For whom will the change be made?

According to the official, the 12% limit of contribution in PF will be abolished only for employees. This will not affect employers. This system will benefit about 6.7 crore employees of the country. The government’s objective is that employees can invest as much of their income as possible in investment options, so that after retirement they get more money for living.

How much contribution does the employer make?

As per EPFO ​​rules, out of the 12% contribution made by the employer, 8.33% goes to the employee’s pension scheme account, while 3.67% is deposited in his PF account every month. Its maximum limit is Rs 15,000. Employees who have joined after September 1, 2014 can contribute only 8.33% or a maximum of Rs 15,000 to their pension fund.

Rules for employees too

EPFO ​​has also made rules for employees’ contribution. Employees who have joined service before 1 September 2014 and have chosen the joint option can contribute 8.33% to their pension fund. The government is thinking of abolishing this limit so that employees can contribute as much as they want to the pension fund. Employees will get another option that they can put as much money as they want in lump sum or pension as per their wish.

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The Ministry of Labor said, it has been decided to take an additional contribution of 1.16 percent out of the total 12 percent contribution of the employers in the provident fund.

At present, the government pays 1.16 per cent of the basic salary up to Rs 15,000 as subsidy for contribution to the Employees’ Pension Scheme (EPS). This provision is retrospective as per the orders given by the Supreme Court, that is, it is applicable from the previous date. Meaning, this provision will come into effect from September 1, 2014, which is the cut-off date as per the Supreme Court order, i.e. employer’s contribution of 12% plus 1.16% will be deducted from the employee’s PF fund retrospectively.

So far more than 12 lakh applications have been received, if you also want that after retirement you get more pension every month, then you can opt for EPS-95. For this, you have to apply on the Integrated Member Portal of EPFO. EPFO has so far received more than 12 lakh applications for higher pension. This number is equivalent to 35 per cent of the total eligible employees.

How to Apply Online

First of all you have to e-Sewa portal – https//unified portal-mem.epfindia.

gov.in/memberinterface/. Here you have to click on Pension on Higher Salary.
A new page will open where 2 options will appear. The second option in this is to apply for the combined option. Select the option below here.
After this you will see a new home page. Here you have to enter your UAN, Aadhaar number, date of birth, mobile number and captcha code by clicking on the option on the left side.
After filling the form, OTP option will appear below, click on it. An OTP will come on your mobile number. Submit it after verifying it.

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You are being given another chance to get higher pension from the Central Government. Yes… You can apply for higher pension now till 26th June. Along with this, the Labor Ministry has said that the employer’s contribution will be 9.49 per cent for the members who sign up for higher pension and are found eligible for it.

Earlier the contribution used to be 8.33 per cent.

A decision has been taken by the Central Government to increase the employer’s contribution. Let us tell you that earlier this contribution used to be 8.33 per cent, but now it has been decided to increase it to 9.49 per cent. As per the amendment, employees will be required to make an additional contribution of 1.16 per cent on salary above Rs 15,000 per month.

Taking into account the decision of the Supreme Court

According to a notification issued by the government, the ministry has said that this has been done in compliance with the SC’s decision of November 4, 2022. The ministry also said that the existing Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 has now been subsumed under the Social Security Code, 2020 and the government has decided to implement the provisions of the Code with regard to the SC verdict.

Order was issued on 4 November 2022

Let us tell you that earlier the Supreme Court had said in its order on November 4, 2022 that EPFO will have to give four months time to all eligible members to opt for higher pension. This four-month period is ending on March 3, 2023. Due to this, an impression was created that its last deadline is May 3, 2023 and now the government has extended this date also till June 26, so that all people can take advantage of it.

The last change was in the year 2014

EPFO had released the details of its process. It was told that the shareholders and their employers can jointly apply for higher pension under the Employees’ Pension Scheme (EPS). In November 2022, the Supreme Court upheld the Employees Pension Scheme, 2014. Earlier, the EPS revision of August 22, 2014 increased the pensionable salary limit from Rs 6,500 per month to Rs 15,000 per month. Also, members and their employers were allowed to contribute 8.33 per cent of their actual salary to EPS, which has now been increased once again. EPFO has issued a circular in this regard to its field offices.

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If the contribution is deposited in the PPF account after April 5 for this financial year, then the account holders will be able to earn less interest than the PPF balance. Explain that investing in PPF account before April 5 will help you earn more tax free interest.

As per the rules of the PPF scheme, the interest on the deposit amount is calculated on the basis of the lowest balance in the PPF account at the end of the month on the fifth day of the month. Therefore, if a person is making a lump sum investment, then he should ensure that the PPF contribution is deposited in the PPF account by April 5.

Let us understand from the example that how much interest will be earned on the PPF account if the lump sum amount is deposited before 5th April. Suppose a person opens a PPF account and invests Rs 1.5 lakh in it on 4th April. The amount is deposited before 5th April. The minimum account balance amount of Rs 1.5 lakh between the fifth day and the end of the month will be used for interest calculation. That is, he will get the interest rate on the amount of 1.5 lakhs.

The interest on PPF account is reviewed every quarter. Here in the example, the annual interest rate has been considered as 7.1 percent. Therefore, the person investing will get an interest of Rs 10,650 on a deposit of Rs 1.5 lakh. On the other hand, if the amount is deposited in the PPF account after April 5, then the person will not get the interest for the first month. For the financial year 2023-24 the person will earn interest only for 11 months. It will be Rs 9,762.50 or Rs 9,763 for a deposit of Rs 1.5 lakh.

The PPF scheme comes with a lock-in period of 15 years. Therefore, PPF investment of Rs 1.5 lakh made between April 1 and April 5 in every financial year will fetch an interest of Rs 18,18,209 and a maturity amount of Rs 40,68,209.

If a person makes a PPF investment of Rs 12,500 before the 5th of every month, then the person will get the maturity amount of Rs 39,44,599. A person will earn an additional interest of Rs 1,23,610 by making a lump sum investment in a PPF account between April 1 and April 5 of a financial year.

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Supreme Court has given a big decision regarding pension. It has said that the provisions contained in the Employees’ Pension Amendment (Scheme), 2014 are lawful and valid. The country’s highest court has canceled the salary limit of Rs 15,000 per month to join the pension fund.

The Supreme Court has said that after the amendment in the scheme, the maximum pensionable salary will have to be kept at 15,000 every month. A bench of the Supreme Court gave this decision. Apart from Chief Justice U U Lalit, two more judges were included in this bench.

The bench said that in the amended scheme, the rule of contribution at the rate of 1.6 percent for the monthly salary amount more than Rs 15,000 for the members has also been quashed. It has said that the additional contribution of 1.6 per cent is beyond the purview of the provisions of the 1952 Act.

The Supreme Court has given four months to EPFO ​​members availing EPS to opt for contribution of 8.33 per cent of their actual salary instead of their pensionable salary. The Supreme Court has amended the orders of the Kerala, Rajasthan and Delhi High Courts.

The Supreme Court has given this decision on the petition of several petitioners including the EPFO ​​and the Central Government. It has said that the fund authorities will have to plan the directions included in the decision within eight weeks. The bench has also said that the employees who have not exercised the option to join the pension scheme will have to exercise the option within six months.

The country’s biggest court has also said that eligible employees who could not join the scheme till the last date should be given additional opportunity for this. This is because the situation has remained unclear after the Kerala, Rajasthan and Delhi High Courts’ decisions on this issue.

The Supreme Court struck down a condition of the 2014 scheme that mandated employees to make an additional 1.6 per cent contribution on salaries above Rs 15,000. The EPFO ​​and the central government challenged the decision of the Kerala, Rajasthan and Delhi High Courts in the Supreme Court.

According to the Employees’ Pension Scheme, 1995, the maximum salary for calculation of pension was Rs.6,500 per month. From employers’ contribution (12 per cent), 8.33 per cent goes into the Employees’ Pension Fund (EPS). A provision was added to the EPS on March 16, 1996. In this, employees and employers were given the option to contribute more to the pension fund.

The Employees’ Pension Scheme was revised in September 2014. Under this, the maximum pensionable salary was capped at Rs 15,000 per month. Members up to September 1, 2014 were given an option to contribute on salary exceeding Rs 15,000 per month. Under this, the employee had to give a joint application with the employer.

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