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Jan 24, 2024

How to Avail the Higher Pension Scheme from EPFO: Eligibility, Benefits, Formula, Calculation, and Form

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Ankit Virani

CEO

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The Employees’ Provident Fund Organisation (EPFO) has allowed its subscribers to opt for a higher pension amount by increasing their contribution towards the Employees’ Pension Scheme (EPS). The new rules allow EPF subscribers to contribute 8.33% of their actual basic pay towards the EPS to earn a higher EPFO pension.

This blog post will explain the EPFO higher pension scheme and its guidelines, form, calculation, formula, eligibility, benefits, and more. Read on to learn how you can avail this scheme and boost your retirement income.

What is the EPFO Higher Pension Scheme?

The EPFO higher pension scheme is a voluntary option for EPF subscribers who want to receive a higher pension amount after retirement. The scheme is based on the Supreme Court’s judgment dated 04/11/2022, which upheld the right of EPF subscribers to contribute to the EPS on their actual salary instead of the statutory wage ceiling of Rs.15,000.

The EPFO issued a circular on 29/12/2022, outlining the eligibility criteria and the procedure for applying for the higher pension scheme. The circular also extended the last date to file the higher pension application or joint option form to 11/07/2023.

The higher pension scheme applies to the following types of EPF subscribers:

  • Those who were members of the EPS-95 scheme or joined the EPF scheme before 01/09/2014.
  • Those who have contributed to the EPS on a higher salary than the statutory wage ceiling of Rs.5,000 or Rs.6,500 or Rs.15,000, as the case may be, at any point in time.
  • Those who have not retired or superannuated before 04/11/2022.
  • Those who have not settled their EPF or EPS claims before 04/11/2022.

The higher pension scheme does not apply to the following types of EPF subscribers:

  • Those who joined the EPF scheme after 01/09/2014.
  • Those who have contributed to the EPS only on the statutory wage ceiling of Rs.15,000.
  • Those who have retired or superannuated before 04/11/2022.
  • Those who have settled their EPF or EPS claims before 04/11/2022.

How to Apply for the EPFO Higher Pension Scheme?

The EPFO has launched a dedicated portal for the higher pension scheme, where eligible EPF subscribers can submit their online application for validation of option or joint option. The portal can be accessed at.

The EPF subscribers can follow the step-by-step guide below to apply for the higher pension scheme:

  • Visit the EPFO higher pension portal and click on “Login”.
  • Enter your UAN and password and click on “Sign In”.
  • Select the option “Apply for Higher Pension” and click on “Proceed”.
  • Fill in the details of your current employer, previous employer, and pensionable salary.
  • Upload the proof of joint option under Para 26(6) of the EPF Scheme, 1952, duly verified by the employer. The proof can be any of the following documents:

-- Wage details submitted by the employer along with the application.

-- Any salary slip or letter from the employer authenticated by the employer.

-- Copy of joint request and undertaking from the employer.

-- Letter from the PF office issued before 04/11/2022 indicating PF contribution on higher wages.

  • Upload the scanned copy of your Aadhaar card and PAN card.
  • Click on “Submit” and take a printout of the acknowledgement slip.

The EPFO will verify the details and documents submitted by the EPF subscribers and process their higher pension claims. The EPFO will also inform the EPF subscribers about the status of their higher pension claims through SMS and email.

Also Read: EPF Balance Check - A Comprehensive Guide for Employees

How to Calculate the EPFO Higher Pension Amount?

The EPFO higher pension amount is calculated based on the following formula:

Higher pension amount = (Pensionable salary x Pensionable service) / 70

The pensionable salary is the average monthly salary for the last 60 months of service. The pensionable service is the total number of years of service in the EPF scheme.

For example, suppose an EPF subscriber has a pensionable salary of Rs.50,000 and a pensionable service of 25 years. The higher pension amount will be:

Higher pension amount = (50,000 x 25) / 70

Higher pension amount = Rs.17,857

The higher pension amount will be subject to a minimum of Rs.1,000 and a maximum of Rs.7,500 per month.

What are the Benefits of the EPFO Higher Pension Scheme?

The EPFO higher pension scheme offers the following benefits to the EPF subscribers:

  • It increases the monthly pension amount after retirement, which can help in meeting the rising expenses and maintaining the standard of living.
  • It provides a regular and guaranteed income for life, which can reduce the dependency on other sources of income or savings.
  • It offers tax benefits, as the pension amount is exempt from income tax up to Rs.50,000 per annum under Section 10(12A) of the Income Tax Act, 1961.
  • It protects the family members, as the pension amount is transferable to the spouse or children in case of the death of the EPF subscriber.

The higher pension amount will be subject to a minimum of Rs.1,000 and a maximum of Rs.7,500 per month.

The EPF subscribers can also use the online calculator available on the EPFO higher pension portal to estimate their higher pension amount. The calculator can be accessed at:

Also Read: Top Government Business Loan Schemes in India

Conclusion

The EPFO higher pension scheme is a voluntary option for EPF subscribers who want to receive a higher pension amount after retirement. The scheme is based on the Supreme Court’s judgment dated 04/11/2022, which upheld the right of EPF subscribers to contribute to the EPS on their actual salary instead of the statutory wage ceiling of Rs.15,000.

The EPFO issued a circular on 29/12/2022, outlining the eligibility criteria and the procedure for applying for the higher pension scheme. The circular also extended the last date to file the higher pension application or joint option form to 11/07/2023.

The EPFO has launched a dedicated portal for the higher pension scheme, where eligible EPF subscribers can submit their online application for validation of option or joint option. The portal also provides an online calculator to estimate the higher pension amount.

The higher pension scheme is a beneficial option for EPF subscribers who want to increase their monthly pension amount after retirement. It can help in ensuring a secure and comfortable retirement life.

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