EPFO Pension Hike: Crores of pensioners of the country can get good news soon. The central government is considering increasing the monthly pension under the Employees’ Pension Scheme (EPS) from Rs 1000 to Rs 7,500 due to rising inflation.

According to the report, there can be a whopping 650% increase in pension (EPS Pension Hike). This is being said because a parliamentary committee is going to evaluate the EPS amendment.

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A standing committee of Parliament has asked the Ministry of Labor to complete the evaluation of EPS from a third party within a specified time frame.

In fact, for a long time, pensioners have been demanding that the minimum pension amount under the Employees’ Pension Scheme be increased. In 2014, the Employees’ Provident Fund Organization (EPFO) had fixed the minimum guaranteed pension at Rs 1,000 for those EPFO ​​members who contribute to the pension scheme for at least 10 years.

According to the report, this is the first time that the government will get the EPS evaluated by a third party. EPS was started three decades ago. Now it is also known as EPS-95.

The standing committee headed by Bharatiya Janata Party MP Basavaraj Bommai wants this evaluation process to be completed by the end of 2025 by the Labor Ministry. In view of this, the committee has asked the Labor Ministry to take up the matter promptly so that the minimum pension amount of Rs 1,000 under EPS can be increased.

What else did the parliamentary committee say?

The committee has said in its report that in the last few years the cost of living has increased manifold. That is, inflation has increased manifold, but the pension amount remains the same.

EPS was started in the year 1995. The aim of this scheme is to ensure a fixed income to the employees after retirement. The Standing Committee of Parliament has said in its report that after 30 years, EPS is being evaluated by some party. The committee recommends that this evaluation should be completed by a certain time frame i.e. by the end of 2025.

After this, the ministry has told the committee that the process of third party review has been started through Request for Proposal (RFP) and the work is currently underway. The ministry has also told the committee that no such review has ever been done before.

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Labor Minister Mansukh Mandaviya made this announcement on Wednesday. Mandaviya said that pensioners covered under the pension scheme of the Employees’ Provident Fund Organization (EPFO) will be able to get pension from any bank or its branch from January. The Labor Ministry said in a statement that Mandaviya has approved the proposal for a centralized pension payment system (CPPS) for the Employees’ Pension Scheme (EPS) 1995. He is also the chairperson of the Central Board of Trustees (CBT), the apex decision-making body of the EPFO.

According to the statement, the centralized pension payment system will enable pension distribution through any bank or any branch across the country. The minister said, “The approval of CPPS is a milestone in the direction of modernization of the Employees’ Provident Fund Organization (EPFO). Under this, pensioners will be able to receive their pension from any bank, any branch anywhere in the country. This initiative solves the long-standing problems of pensioners. This system ensures a seamless and efficient distribution system.

78 lakh pensioners will benefit

Mandaviya said that this is an important step towards our efforts to transform EPFO ​​into a more robust, responsive and tech-enabled organization to better serve the needs of its members and pensioners. The centralized pension payment system is expected to benefit more than 78 lakh EPS-95 pensioners of EPFO. The centralized system will ensure seamless distribution of pension across the country without the need to transfer the Pension Payment Order (PPO) from one office to another. This will be a big relief for those pensioners who move to their hometown after retirement.

No need to go to bank branch for verification

Pensioners will not need to go to the bank branch for verification at the time of pension commencement and the payment will be credited immediately when it is released. Along with this, EPFO ​​hopes that the new system will significantly reduce pension distribution costs. This facility of EPFO ​​will be launched from January 1, 2025 as part of EPFO’s ongoing information technology modernization project Centralized IT Efficient System (CITES 2.01). In the next phase, CPPS will bring a smooth transition to Aadhaar-based Payment System (ABPS).

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Employees’ Provident Fund Organization (EPFO) has released an Excel utility-based calculator to estimate the dues. Which one has to pay from the remaining amount of his EPF or from his savings, if necessary. Employees can now determine how much contribution they will have to make to get higher pension from the Employees’ Pension Scheme (EPS). 

This is a special facility for the employees from the Employees’ Provident Fund Organization. Which can be used by the employees to know their contribution. EPFO has extended the application deadline for higher pension by 15 days to July 11, 2023.

Know how to download EPFO’s excel calculator for more pension –

• To use this calculator, the employees should know the date of registration of their EPF scheme. On joining the EPF system after November 1995, the employee has to enter the salary amount starting from that date.
• Click on “Pension on higher pay: exercise of combined option under para 11(3) and para 11(4) of the EPS 1995” on or before 11th July, 2023.
• Click on the calculator to estimate arrears of pension on higher pay.
• Read the disclaimer and click ‘Download Calculator’

It has 5 sections which include Salary Entry, Calculation Sheet (Payment to be made by the member), Summary details under various sheets. The actual outstanding amount will be calculated on the basis of records by the concerned Regional Office of EPFO.

How to use EPFO’s Excel calculator?

Before using this calculator, the employees should have access to all their pay checks from the day they joined the EPS scheme. This is so that the employee can enter his monthly salary information manually in the calculator. Do note that as per the EPF laws, basic salary plus any dearness allowance is considered as “Salary” for the purpose of computing monthly contribution to EPS and EPF accounts.

An employee has to manually enter the basic salary data into an Excel calculator using the information from the pay slip. After entering the information, further calculations will be done by the calculator. Along with this, interest will also be calculated through the calculator. 

If there is sufficient balance in the employee’s EPF account, both these amounts will be clubbed and paid into the EPS account. Note that the amount deposited in the EPF account till March 31, 2023 will be calculated by the Excel calculator till the financial year 2022-2023 only. Based on the date of payment, it shows the total amount to be paid till FY 2022-23 as well as the additional amount to be paid for the current financial year (2023-24).

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EPFO has issued a circular saying that higher pension will be calculated for employees opting for higher pension on the basis of actual salary under EPS. According to the circular, the formula for higher pension calculation will be different for those who retire before September 1, 2014 and those who retire after this date.

Pension calculation for those retiring before 1st September 2014

As per EPFO ​​If an eligible applicant’s pension (EPS) started before 1st September 2014 then higher pension will be calculated during the contribution period during 12 months preceding the date of retirement Will be based on the average monthly salary received.

Pension calculation for those retiring on or after 1st September, 2014
For those retiring on or after 1st September, 2014 higher considering the average pay drawn during the contribution period of service in the period of 60 months preceding the date of retirement EPS pension will be calculated.

Why is 1st September 2014 important?

It is important to note that the government had revised the pension calculation formula in September 2014. The average salary during the 12 months preceding the date of retirement up to 31st August 2014 was taken into account. However, from September 1, 2014, the government revised it to 60 months. As a result of this change, the pension of those who retired on or after this date was reduced.

Average salary is the basic salary of an employee. However, for those opting for higher EPS pension, the pay used for calculation of higher pension will be full actual pay (including allowances etc.) instead of just basic pay.

Understand pension calculation with example

• Assume you have joined the EPS scheme in October 2008 and your retirement is in September 2033. Here the service period is 25 years (September 2033-October 2008). The average salary for the purpose of pension calculation will be calculated on the basis of your average salary for the last 5 years (60 months).
• If you had retired on or before 31st August 2014, then the average salary for higher EPS pension will be calculated on the average salary of the last year of service.

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EPFO has finally come out with a mechanism for contribution towards Higher EPS Pension, as per which members opting for Higher Pension will no longer have to contribute an additional 1.16% of their salary. Rather, this contribution will be made from the employer’s share to the employee’s EPS account.

EPFO has amended the rule regarding deduction of contribution with effect from September 1, 2014 regarding EPS pension. Because, the Supreme Court in its judgment declared this rule invalid on 4 November 2022 and asked EPFO ​​to introduce a replacement system.

In a circular issued on 3 May 2023, the Ministry of Labor and Employment said that out of the total 12% contribution of employers in PF, it has been decided to take an additional contribution of 1.16%. Alok Agarwal, partner, Deloitte India, said EPFO ​​has given an important clarification that the additional 1.16 per cent contribution will be diverted from within the total 12 per cent of the employer’s PF contribution.

Employees whose salary is less than the salary limit fixed by EPFO ​​have to contribute to EPF and EPS. For employees opting for higher pension, the EPFO ​​was asked to pay an additional 1.16% on the portion of their basic pay which was above the wage ceiling. But as per the Supreme Court judgment and the existing instructions, the employees will have to pay only 12% of the actual basic pay and no additional amount will have to be paid for the higher pension.

Alok Agarwal, partner, Deloitte India, said that apart from the additional contribution in the higher pension application, doubts were raised on several points by employers and employees. Many EPS members still did not fully understand the financial parameters and the use of joint options.

In such a situation, increasing the date of application from 3rd May to 26th June has been the right decision. At the same time, the new system of EPFO ​​regarding contribution is a big relief for EPS members.

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This money is deposited in the Pension Fund out of the money that is deducted as contribution to Provident Fund (PF) from the salary of the employees. Now if an employee has to increase the amount of pension in his PF contribution, then the Employees’ Provident Fund Organization (EPFO) has issued a circular. The last date for getting more pension has been fixed as May 3. Come, let us know how the employees will be able to increase the amount deposited in their pension fund?

May 3 last date

According to media reports, a circular has been issued by EPFO regarding some problems being faced by employees and pensioners to get more pension. Three issues have been clarified in the circular of EPFO. Firstly, what will happen after joint submission of application for higher pension? Second, what if there is a mistake in the Combined Application Form? Thirdly, what to do if the joint application form is not approved by the employer i.e. the company. The last date to apply for getting more pension is May 3.

what is the process

In the circular issued by EPFO, it has been said that after submitting the joint application form, the regional office of EPFO will scrutinize it. Once the required documents are completed and the salary details are submitted by the employer, it will be verified from the data available with EPFO. Once the data is verified, the EPFO will calculate the dues and an order will be passed to credit or transfer the dues.

What if the data doesn’t match

According to the circular, it is possible that there is a mismatch between the data available with the EPFO and the information provided by the employer and the employee. It has been clarified in the circular that in case of non-availability of day mail, the employer and employee or pensioner will be informed by EPFO. They will be given one month’s time to give correct information.

What if the joint form is not accepted by the employer?

Now if the joint application form is not approved by the employer, then in such a situation the employer will be given a chance to provide additional evidence or rectify any mistake. This opportunity will be provided for one month. Its information will also be given to the concerned employees and pensioners.

E-pass book service disrupted

According to media reports, the e-passbook service of EPFO has been disrupted for the past few days. EPFO members are also complaining that they are not able to receive their e-passbooks in the last few days and the EPFO website and its UMANG app are also not working. Explain that e-passbook is such a document, which contains all the information about your EPF and EPS accounts. Here, EPFO has told the members who deposited the amount that the concerned team is investigating the situation. Give yourself some time to improve.

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In this, information related to three cases has been given. Firstly, what will happen after submitting joint application for higher pension. Secondly, what will happen if there is any mistake in the joint application. Third, what if the joint application is not approved by the employer company?

Will be investigated by field officer

If you also want to apply for more pension, then its last date is 3rd May. According to the circular issued by EPFO, after submitting the Joint Application Form till the last date, it will be scrutinized by the field officer. Once all the documents are completed, the salary details are submitted by the employer. After this it will be verified from the data available with EPFO. After the data is certified, the balance amount will be calculated and an order will be given to transfer it.

One month’s time to give correct information

If the information available with EPFO ​​does not match with the information given by the employer and the employee, then the employer and the employee will be informed by the EPFO. One month’s time will be given to provide correct information. Apart from this, in case the joint application form is not approved by the employer, the employer will be given a chance to provide additional evidence. This opportunity will also be given for one month. Information about this will be given to both employees and pensioners.

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Actually, with the decision of the Supreme Court, the pension of the Employees Pension Scheme (Employee Pension Scheme) of lakhs of employees contributing to the Employees’ Provident Fund (EPF) can increase by up to 300% in one stroke! EPFO has fixed the maximum salary for EPS pension of employees at Rs 15 thousand (basic salary). Now the Supreme Court can abolish this salary-limit of Employees’ Provident Fund Organization.

The matter is sub judice and hearing is going on continuously. In the Employee Pension Scheme of the employees, the pension can also be calculated on the last salary i.e. higher salary bracket. With this decision of EPFO, employees will get many times more EPS pension. Explain that it is necessary to contribute to EPF for 10 years to get pension. Whereas, after completing 20 years of service, a weightage of 2 years is given.

How will your Employee Pension Scheme pension increase?

According to the existing system of Employees’ Provident Fund Organization, if an employee is working from June 1, 2015 and wants to take pension after completing 14 years of service, then his Employee Pension Scheme (Employee Pension Scheme) Pension will be calculated at Rs 15,000 only, even if he is working with an EPS employee. Salary 20 thousand rupees.

Be it in the basic salary bracket or Rs.30,000. According to the old formula, on completion of 14 years, the employee will get a pension of about Rs 3000 from June 2, 2030. The formula for calculation of pension is (service history x 15,000/70). But, if the Supreme Court decides in favor of the employees, then the pension of the same employee will increase.

Example of increase in Employee Pension Scheme

Suppose the Employees’ Provident Fund Organization subscriber’s job is 33 years. His last basic salary is 50 thousand rupees. Under the existing system of Employee Pension Scheme, pension was calculated only on a maximum salary of Rs 15,000. In this way (Formula: 33 years+2= 35/70×15,000) the pension would have been only Rs 7,500. This is the maximum EPS pension in the current system. But, after removing the limit of pension, adding the pension according to the last salary, he will get a pension of Rs 25000 thousand. Means (33 years+2= 35/70×50,000=Rs 25000).

What is the whole matter of Employee Pension Scheme

The Employees Pension Scheme (Employee Pension Scheme) Amendment, 2014 was implemented by the Central Government by issuing a notification from 1st September 2014. This was opposed by private sector employees and was heard in the Kerala High Court in the year 2018. All these employees were covered by the facilities of EPS EPF and Miscellaneous Provisions Act, 1952.

The employees protested against the rules of the Employees’ Provident Fund Organization, saying it ensured them less pension. Because the salary may be more than 15 thousand, but the calculation of EPS pension has been fixed on a maximum salary of 15 thousand rupees. However, before the revision made by the central government on 1 September 2014, this amount was Rs 6,500.

Considering the rules of the Employee Pension Scheme as unfair, the Kerala High Court had given its verdict while accepting the writ of the employees. On this EPFO filed an SLP in the Supreme Court, which was dismissed by the Supreme Court. Now this matter is being heard again. Employees’ Provident Fund Organization (Employees’ Provident Fund Organization) employees can get good news soon!

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It is believed that under the Employees’ Pension Scheme-95, the pension can increase by 333%. In the Employees’ Pension Scheme, the maximum pension is fixed at Rs.15 thousand. After this it is sealed. Meaning, even if the basic salary is more than Rs 15,000 per month, your pension will be calculated on the maximum salary of Rs 15,000.

EPS Pension can increase manifold!

The ceiling of pension matter is pending with the Supreme Court bench. It has been heard at many levels. The union is continuously demanding that the capping on pension should be abolished. If the decision is in favor of the employees, then the calculation of pension (Employee’s Pension Scheme) can also be done on the last salary i.e. high salary bracket. 

With this decision, it is possible to increase the pension of employees up to 300%. The condition for getting pension under EPS is that it is necessary to contribute to the Employees’ Provident Fund (EPF) for 10 years. At the same time, the weightage of 2 years is available on completion of 20 years of service. Removing the ceiling will make a big difference.

How will your pension increase in EPS-95?

According to the existing rules, if an employee is doing a job from June 1, 2015 and if he wants to take pension after completing 14 years of service, then his pension would be calculated at Rs 15,000 only. Whether the employee is in basic salary of 20 thousand rupees or 30 thousand rupees. According to the old formula, the employee will get a pension of about Rs 3000 from June 2, 2030, on completion of 14 years. The formula for calculation of pension is- (Service Historyx15,000/70). But, if the ceiling of pension is abolished, then the pension of the same employee will increase.

Example No.1

Suppose the salary (Basic Salary + DA) of an employee is at 20 thousand rupees. Calculating with the formula of pension, his pension will become Rs.4000 (20,000X14)/70 = Rs.4000. Similarly, the higher the salary, the more he will get the benefit of pension. There can be a 300% jump in the pension of such people.

Example No.-2

Suppose the job of an employee is 33 years. His last basic salary is 50 thousand rupees. Under the current system, the calculation of pension would have been done only on the maximum salary of 15 thousand rupees. In this way (Formula: 33 Years+2= 35/70×15,000) the pension would have been Rs 7,500 only. This is the maximum pension in the current system. But, after removing the pension ceiling, adding pension according to the last salary, they will get a pension of 25000 thousand rupees. Means (33 years+2= 35/70×50,000= Rs 25000). 

333 percent salary will increase

Let us tell you that according to the rules of EPFO, if an employee contributes to the EPF continuously for 20 years or more, then two more years are added to his service. In this way, 33 years of service was completed, but pension was calculated for 35 years. In such a situation, the salary of that employee can increase by 333 percent.

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What is the matter of removal of EPS limit Before proceeding on this matter, let us understand what is this whole matter. At present, the maximum pensionable salary is limited to Rs 15,000 per month. Meaning, whatever your salary may be, but the calculation of pension will be only on Rs 15,000. The matter is going on in the court to remove this limit.

On August 12 last year, the Supreme Court had adjourned the hearing of a batch of petitions filed by the Union of India and the Employees’ Provident Fund Organization (EPFO), which said that the pension of employees cannot be limited to Rs 15,000. . The hearing of these cases is going on in the court.

What are the rules regarding EPS now?

When we start working and become a member of EPF, then at the same time we also become a member of EPS. The employee gives 12% of his salary in EPF, the same amount is also given by his company, but a part of this 8.33 percent also goes to EPS. As we mentioned above that at present the maximum pensionable salary is only 15 thousand rupees, that means every month the pension share is maximum (8.33% of 15,000) Rs 1250.

Even when the employee retires, the maximum salary for calculating the pension is considered to be only Rs 15 thousand, according to this, the maximum pension an employee can get under EPS is Rs 7,500.

This is how pension is calculated

One thing must be noted that if you have started contributing to EPS before September 1, 2014, then the maximum limit of monthly salary for pension contribution for you will be Rs.6500. If you have joined EPS after September 1, 2014, then the maximum salary limit will be 15,000. Now see how pension is calculated.

EPS Calculation Formula

Monthly Pension = (Pensionable Salary x Years of EPS Contribution)/70
Here assuming the employee started contributing to EPS after 1st September, 2014, then the pension contribution would be Rs 15,000. Suppose he has worked for 30 years.
Monthly pension = 15,000X30/70 = Rs 6428

Maximum and Minimum Pension One more thing to remember that the employee’s service of 6 months or more will be considered as 1 year and if it is less then it will not be counted. Meaning if the employee has worked for 14 years 7 months, then it will be considered as 15 years.

But if you have worked for 14 years and 5 months, then only 14 years of service will be counted. The minimum pension amount under EPS is Rs 1000 per month, while the maximum pension is Rs 7500. 8,571 will get pension If the limit of 15 thousand is removed and your basic salary is 20 thousand rupees, then the pension you will get according to the formula will be this. (20,000 X 30)/70 = Rs 8,571.

Existing Conditions for Pension (EPS)

It is necessary to be an EPF member for pension.
It is mandatory to be in the job for at least 10 regular years.
Pension is available when the employee turns 58.
There is an option to take pension after 50 years and even before the age of 58.
Keep in mind that on taking the first pension, you will get the reduced pension and for this you will have to fill Form 10D.
On the death of the employee, the family gets pension.
If the service history is less than 10 years, then they will get the option to withdraw the pension amount at the age of 58 years.

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