A statement from the Labor Ministry said that EPFO ​​has provided online facility to submit applications for verification of joint options for pension on higher salary.

17.49 lakh applications received from pensioners till 11 July 2023

In compliance with the Supreme Court order dated 4 November 2022, this facility was introduced for eligible pensioners or members on 26 February 2023. It was to be made available by 3 May 2023. However, considering the representation of the employees, the time limit has been extended to 26 June 2023 to give four months’ time to the eligible pensioners / members to file the application. They were also given an additional 15 days to remove any difficulty. This made the last date for submission of applications 11 July 2023 and till this date 17.49 lakh applications were received from pensioners.

More than 3.1 lakh applications still pending with employers

However, even after this, on the request of employers and employer associations to extend the time to ‘upload’ the salary details, the deadline for submitting salary details etc. online was first extended to 30 September 2023, then to 31 December 2023 and then to 31 May 2024. Despite such a long extension, it was seen that more than 3.1 lakh applications are still pending with the employers for verification of combined options.

The ministry said, therefore, employers are now being given a ‘last chance’ till January 31, 2025 to settle these pending applications and ‘upload’ them soon. Employers were also requested to submit their replies and update the information in more than 4.66 lakh cases by January 15, 2025. Where the Employees’ Provident Fund Organization (EPFO) has sought additional information about the application received and examined by it.

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There has been a big shock for the employees working in government and organized sector. Actually, the retirement fund body Employees Provident Fund Organization (EPFO) has banned the increase in retirement and death gratuity for employees. Last month, EPFO, in an order issued on April 30, 2024, had said that retirement gratuity and death gratuity have been increased by 25 percent from Rs 20 lakh to Rs 25 lakh. This increase was due to 50 percent increase in Dearness Allowance (DA) of central government employees.

On May 7, EPFO ​​had announced to stop the increase in gratuity with immediate effect due to increase in DA. No reason was given for this decision in the order.

Also Read: PF Death Claim: New rule simplifies EPF death claim process, Here is how

4 percent increase in DA announced in March

The Central Government had increased Dearness Allowance (DA) and Dearness Relief (DR) by 4 percent in March 2024. This was a big relief for lakhs of central government employees and pensioners. After this increase, DA of the employees became 50 percent of the basic salary. Let us tell you that due to the increase in DA, there has been an increase in the various allowances of the central government employees.

What is Gratuity?

If an employee works for a long time in a company, he gets gratuity apart from salary, pension and PF. This is a reward received by an employee from the company. At present, any employee is entitled to receive gratuity only if he has worked for at least 5 years.

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EPFO, the body managing the retirement fund, added 13.40 lakh members in March on a net basis. With this, a total of 1.39 crore members increased in the last financial year. This information was given in the data released on Saturday.

EPFO gave these figures

EPFO had added 1.22 crore members on a net basis in the previous financial year. “Out of 13.40 lakh members added in March, about 7.58 lakh new members have come under the ambit of EPFO ​​for the first time,” the labor ministry said in a statement. The statement said, “During the financial year 2022-23, about 1.39 crore members have been added on a net basis with an increase of 13.22 percent on an annual basis.

1.94 lakh members in the age group of 22-25 years included

1.22 crore members were associated with this in the last financial year. The Employees’ Provident Fund Organization (EPFO) said that the maximum number of enrollments among new joining members were in the age group of 18-21. Their number was 2.35 lakh. After this, 1.94 lakh members in the age group of 22-25 joined. New members in the age group of 18-25 account for 56.60 per cent of the total members added this month, according to the statement.

As per the data, around 10.09 lakh members re-subscribed to EPFO. That is, these members changed jobs. In terms of gender, 2.57 lakh female members were added in March, which was 19.21 percent of the total members added this month.

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Nowadays there are many options available for retirement plan in the market. In these, the retirement plan related to insurance is very important. Because insurance products provide the benefits of life insurance along with savings. Apart from this, better retirement planning can be done by investing in several savings plans including mutual funds, PPF and post office.

However, insurance companies are offering many insurance plans including life insurance, term insurance, ULIP plans, money back and endowment plans to meet the demands of customers related to retirement planning. Let us know about those 5 selected retirement plans, which can prove to be helpful for you in old age.

Max Life Guaranteed Lifetime Income Plan

In Max Life Guaranteed Lifetime Income Plan, along with many benefits, you also get guaranteed fixed income after retirement. The monthly premium in this plan is Rs 10,000. There are both single and dual life annuity options and you get the option of taking the pension amount every month, 3 months, 6 months and annually.

SBI Life Saral Retirement Saver Plan

SBI Life Saral Retirement Plan helps you build a substantial retirement corpus. Along with this, it also guarantees you the future security of the family. Preferred term rider is also available in this plan, along with investing in this plan, you can also get the benefit of income tax deduction. By getting recurring reversionary bonuses during the policy period, your retirement fund grows gradually and eventually you get a hefty amount. Lump sum, monthly, biennial and annual options are available for premium payment in this plan.

LIC New Jeevan Shanti Plan

With LIC New Jeevan Shanti Plan, you can choose between Single Life for One Time Premium and Deferred Annuity for Joint Life. This plan can be purchased both online and offline. Till the end of the deferment period, additional death benefits will be paid at the end of each policy month. It has monthly, quarterly, half-yearly and annual in annuity mode. Loan facility will be available against the policy after 3 months from the completion of the policy.

Bajaj Allianz Life Long Life Goal

Bajaj Allianz Life Longlife Goal Plan, is a unit-linked plan, in which you can earn continuous income till the age of 99 years. This plan is available in two options, with premium waiver benefit and without premium waiver benefit. The plan has 4 different investment portfolio options along with Loyalty Addition every year from 5th to 25th policy year. At the same time, after the 5th year, you can also withdraw some money from it.

National Pension Scheme

If you want to invest in a tax friendly scheme, then National Pension Scheme can prove to be a very good option for you. This scheme is also safe i.e. the money invested here will not be lost. You can invest in this scheme to live a life of peace and comfort at the time of retirement. In this scheme you will get a fixed pension. After paying premium continuously for 3 years, you can withdraw money from it. Only 25% of the total deposit amount can be withdrawn before maturity.

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But if you do not want to invest separately, then EPF can come in handy. Employees’ Provident Fund Organization gives an opportunity to its account holders, through which if they invest some part of their salary in EPF, then you can get a substantial amount at the time of retirement.

According to the experts, if your basic salary is 20 thousand and from the age of 25, 24% (12% Employee + 12% Employer) EPF is deducted, then accordingly an investment of Rs 4800 will be made every month. If you keep investing continuously for 25 years, then you can get a corpus of 2.79 crores on retirement. Let us understand about it in simple words…

This is how retirement fund will be prepared

• You are given an interest rate of 8.5% while investing in EPF. If we assume salary hike of 7% then investment started at the age of 25 will make you a millionaire till old age. Let us understand in the steps how much benefit will be given at what age to start…
• If the age to start investing is 25 years and the basic salary is 20 thousand, then you can get Rs 2.79 crore at the time of retirement.
• If the salary is Rs 28,051 at the age of 30, then 2.30 will be available at the time of retirement.
• At the age of 35, the salary is Rs 39,343, so at the time of retirement you will get Rs 1.85 crore.
• If you start investing from the age of 40, then you will get Rs 1.42 on the basic salary of Rs 55,181.
• At the age of 45, the basic salary is Rs 77,394, so you will get Rs 1.03 crore.
• At the age of 50, the basic salary is Rs 1,08,549, so you will get 66.44 lakhs at the time of retirement.

keep these things in mind

• Do not withdraw money from EPF unless there is some very important work or emergency, as withdrawing money will keep reducing your old age savings. For example, if you withdraw Rs 1 lakh from the PF account at the age of 30, then at the age of 60, Rs 11.55 lakh will be reduced from the retirement fund.
• Apart from this, get your old account transferred only after changing jobs. The older the PF account, the more benefits you will get.
• In case of non-transfer, interest will accrue on the new account, but the interest on the old account will stop after 3 years. You can easily transfer EPF account through UAN.

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However, a formal announcement is yet to be made. But, there is speculation that it can be implemented in the coming months. The matter is that whenever it is implemented, the biggest change will be seen in the salary structure. Till now you must have heard that your in hand salary will be reduced in the salary structure with the coming of new labor law. Because, the basic salary will be 50%.

This will cut more money into the retirement fund. The huge amount of allowances will be reduced. Now here is the twist. Even after the new salary structure comes, your in hand salary will not decrease but will increase. Let’s understand how…

Basic salary will be 50%

First understand that the government has prepared 4 new labor codes by adding 29 labor laws. According to the provisions of the new law, the basic salary will be 50% of the total salary (CTC) in the salary that companies will pay to their employees. This means that the basic salary which used to be 30-35 percent earlier, will be increased by 15 percent directly and the reimbursement-allowance part will remain 50 percent.

What is in the current salary structure?

Suppose your monthly salary is an annual package of Rs 1.5 lakh i.e. Rs 18 lakh. In the current salary structure, the basic salary is 32% of the CTC. In this sense, in the monthly CTC of 1.50 lakh, the basic salary will be Rs 48,000. Then 50 percent i.e. Rs 24,000 HRA then 10% of basic (Rs 48,000) in NPS i.e. Rs 4,800 will go. 

If 12% of the basic salary goes to the Provident Fund (PF), then Rs 5,760 will go to the EPF every month. In this way your monthly CTC of Rs 1.50 lakh has become Rs 82,560. This means that the remaining Rs 67,440 is being given through other items. These include components like special allowance, fuel and transport, phones, newspapers and books, monthly share in annual bonus, gratuity.

Whose share in the current salary structure

How much tax is made, how much is the salary in hand and how much is retirement savings?

• Out of your total CTC, Rs 1.10 lakh will be taxed. That means 6.14 percent tax of CTC.
• Take home salary – Rs 1.14 lakh, 76.1 percent of CTC.
• Retirement savings – Rs 1.96 lakh, totaling 10.9 percent of CTC.

With the implementation of the New Wage Code, there will be a change in the salary structure of the employees. Think of it like this-

How much tax, how much salary in hand and how much will be retirement savings?

• Out of your total CTC, Rs 1.19 lakh will be taxed. That means 6.6 percent tax of CTC.
• Take home salary – Rs 1.06 lakh, 70.4 percent of CTC.
• Retirement savings- Rs 3.06 lakh, 17 per cent of the total CTC.
• In the new structure, your annual retirement savings will be Rs 3.06 (17% of CTC) as against Rs 1.96 lakh (10.9% of CTC) earlier. Meaning, your annual retirement savings will increase by Rs 1.10 lakh under the new structure.

HRA will get less tax exemption

According to the new rule, suppose the annual basic salary is Rs 9 lakh, then the HRA will be Rs 4,50,000. But, you will get tax exemption only on the exemption of Rs 2,42,400. Meaning tax will have to be paid on Rs 2,07,600. Earlier, you had to pay tax on only Rs 45,600 received under the head of HRA. There is going to be a huge increase in tax on HRA in the new salary structure. If you compare the tax on annual CTC, now you have to pay tax of 1.10 lakh (6.1% of total CTC), which will be Rs 1.19 lakh (6.6% of total CTC) in the new structure.

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EPFO gave information through tweet

EPFO said in a tweet- EPS’95 pensioners can now submit life certificate at any time. The validity of this life certificate will be for 1 year from the date of submission. Employees’ Provident Fund Organization (EPFO) has provided various options and facilities for EPS pensioners to submit their Digital Life Certificate (DLC) through online medium near or at their doorstep. Explain that the life certificate submitted by all these means is equally valid and will be recognized everywhere. EPS 95 has been implemented with effect from November 19, 1995.

Submit digital life certificate like this Apart from EPFO’s 135 regional offices and 117 district offices, EPS pensioners can now deposit DLC at Pension Disbursement Bank branch and nearest post offices. DLC can also be deposited at the nationwide network of over 3.65 lakh Common Service Centers (CSCs). Apart from this, EPS pensioners will also be able to deposit DLC through Umang app.

India Post Payments Bank (IPPB) has launched Doorstep Digital Life Certificate (DLC) service for pensioners. EPS pensioners can now submit online request for availing DLC ​​service at home on payment of nominal fee. A postman from the nearest post office will visit the pensioner and complete the process of making DLC ​​at the pensioner’s home. Due to this, now the pensioner’s work will become even easier than before.

Know these important things Life certificate will be valid for one year from the date of submission of DLC. Pensioners who have been issued Pension Payment Order (PPO) in 2020 need not upload JPP till completion of one year. Earlier, all EPS pensioners were required to submit DLC in the month of November. As a result, pensioners faced hardships due to long queues and rush to submit digital life certificates.

According to a statement by the Union Ministry of Labor and Employment, EPS 1995 is a defined contribution-defined benefit social security scheme. The corpus of the Employees’ Pension Fund is made up of 8.33 per cent contribution by the employer of the salary and the contribution by the Central Government at the rate of 1.16 per cent of the salary through budgetary support at the rate of Rs. 15,000/- per month. All benefits under the scheme are paid out of such accumulations. Funds are valued annually as mandated under paragraph 32 of EPS.

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