The great news for employees provident fund organisation (EPFO) contributors and pensioners is the changes made in the EPFO as directed by the Supreme Court for higher pensions.
Though most of them might have gone through the new provisions, we would like to highlight important points for our readers.
The following employees will, with their employers, submit joint options under para 11(3) and 11(4) to their respective regional offices –
1. The employees and employers who had contributed under paragraph 26(6) of EPF scheme on salary exceeding the prevalent wage ceiling of Rs5,000 or Rs6,500; and
2. Did not exercise joint option under the proviso to para 11(3) of the pre-amended scheme while being members of EPS 95 and;
3. Were members prior to 1 September 2014 and continued to be members on or after this date.
(As per the relevant circulars available under frequently asked questions (FAQ) download on the EPFO website, para 11(3) specifies the maximum pensionable salary limited to Rs15,000 per month; para 11(4), inter alia, states that existing members as on 1 September 2014 who, with his employer had been contributing on a salary of Rs6,500 per month (pm) may jointly exercise fresh option with the employer to contribute on a salary exceeding Rs15,000 pm. Paragraph 26(6) provides for a joint request by the employee and employer to allow the employee to contribute more than Rs15,000 pm if certain conditions are satisfied. There is one more option, viz., EPFO Schemes on the right-hand side of the EPFO website and these two circulars can be downloaded in pdf from there.)
How to apply to the concerned regional office -
1. The request will be made in such form or manner as may be specified by the commissioner.
2. The joint option will contain a disclaimer and declaration.
3. In case of share requiring adjustment from the provident to the pension fund and if any re-deposit to the fund, explicit consent of the employee will be given in the joint option form.
4. In case of transfer of funds from exempted provident fund trust to the pension fund of EPFO, an undertaking from the trustee shall be submitted. Due contributions, along with interest up to the date of payment, will be deposited within the specified period.
5. In case of unexempted establishments refund of requisite employer’s share of contribution, the same shall be deposited with interest at the rate declared under para 60 of EPF Scheme 1952, till the date of actual refund.
6. The method of deposit and computation of pension will follow through another circular.
7. The joint option must contain proof of remittance of the employer’s share in the provident fund on higher wages exceeding the ceiling of Rs5,000/ Rs6,500 and proof of joint option under para 26(6) of EPF scheme duly verified by the employer.
When, initially, I tried to obtain confirmation of the above-mentioned changes from the official website of EPFO, i.e., https://www.epfindia.gov.in
, I was stunned to notice that these important changes were not highlighted predominantly anywhere on this website as on 17 March 2023!
I saw a scroller ‘What’s New’ on the left-hand side of the portal and eagerly surfed through in an attempt to find out something about this issue but in vain. While trying to find out more about it, I came across a press report, that EPFO had issued a circular on 20 February.2023 with relevant instructions about the new amendments.
So, I checked the ‘EPFO Press Release’ option and then selected the month of February which again disappointed me with this information - EPFO_CIRCULAR
. In another attempt, I simply clicked to open the press report and got the circular on this link - SC_JUDGEMENT
Well, so far so good. Next, one was to understand how to register this joint option. Yes, there is an option to submit it physically with the designated regional office of the EPFO for those who are not computer savvy.
But how others will do it online? Again, I got stuck up with the EPFO portal and then read in a newspaper item that this should be done through e-sewa portal with this url – https://unifiedportal-mem.epfindia.gov.in/memberinterface/
. It opens the following screen giving two links under the ‘Important Links’ option on the right-hand side; one for registering the joint option and another for validating the same.
The first one opens a screen as shown below to get the authorisation PIN, validation of the user, submission of application and generation of acknowledgement number after filling up the required information. This link shows that the last date of submission is extended up to 3 May 2023.
The second link opens almost a similar screen, but for validation of the joint option. Earlier, there were reports that the site had stopped functioning, but now it seems that the initial glitches are set right, albeit the slow functioning of the site.
The key question is whether one should opt for this or not. Many fear loss of their own contribution to some extent for getting a higher pension. I also came to know about some practical issues. One user informed that the company he was working with has closed down, so how to exercise the joint option?
A friend who was working with a small cooperative bank, which was taken over by another cooperative bank and that also collapsed, was worried whether he would get the pension at all. Another one wanted to know arrangements made for handicapped retired employees. My efforts of collecting information ended with links related to newspaper articles and the EPFO or e-sewa portal hardly gave any authentic information about the advantages and disadvantages of exercising the joint option.
The EPFO website itself does not seem to provide a link to the e-sewa portal. Generally, in such cases, certain examples are given to explain the working. I did not find any after several searches on both of these websites. With advanced technology, both sites could have provided a calculator to have a better idea. Such types of calculators are available on the websites of insurance companies for premium, banks for EMI (equated monthly instalments) and even electric supply companies to work out consumable units after we provide a list of the apparatus, electric gadgets, etc., we use at home. Though the EPFO circular says “Method of deposit and computation of pension will follow through another circular,” it does not seem to be available.
It was extremely difficult for me to find out something authenticated on these portals and almost every search led me to various links related to some newspapers but not to EPFO or e-sewa. I shall be glad to have readers’ feedback if they find something worthy.
(Retired banker Abhay Datar is a consumer activist and an expert counsellor at Moneylife Foundation. He was a member of the Managing Committee of Mumbai Grahak Panchayat (MGP) and also the treasurer at MGP for over two and a half years. After working at Bank of Baroda for 29 years, he retired as IT Manager. Mr Datar has resolved many cases related to banking and has also handled cases related to insurance and mediclaim.)