The last deadline on the matter of ‘Pension on Higher Wages’ expired on May 31, 2024. It was rolled out in late 2022 following an order by the Supreme Court. According to reports, more than 3.6 lakh applications were waiting to be processed with thousands of employers across the country as on January 3, 2024. This compelled the authorities to extend the deadline from December 31 last year to May 31.
The pensioners and members who had applied for ‘Pension on Higher Wages’ are eagerly waiting for a decision from the Employers’ Provident Fund Organisation. To put it simply, it concerns financial security in their life after retirement.
EPF and EPS 95 Scheme
The genesis of the entire controversy lies in the fact that the pension that the EPFO pays its members – only those who have completed at least 10 years of service are entitled to have a pension – is grossly inadequate, the maximum possible amount being Rs 7,500 a month. On the other hand, the minimum pension is a paltry Rs 1,000.
The EPS 95 Scheme that lays down the provision of pension by the EPFO was amended in September 2014. The ceiling on monthly pension then stood at Rs 6,500 and the amendment pushed it up to Rs 15,000.
Those who wanted to go for the modified arrangement, were asked to make a choice within 6 months. Employees who would opt for the new scheme were asked to contribute 1.16% of their monthly salary exceeding Rs 15,000 towards the pension fund.
This promptly sent a number of retired employees and current EPFO members to court. They pleaded that they missed out new benefits. The apex court supported the 2014 amendment, allowed subscribers to opt for higher pensions, but negated the contribution of 1.16% from the employees. The judges also extended the time period by 4 more months apply.
Demand notice and after
As things played out last, the amount to be paid by the pensioner/EPFO member was informed by the appropriate EFPO in the Demand Notice. It was drawn up after scrutinising the application of eligible applicants. This presupposes that the employer firm acted upon the application of a willing employee and forwarded his/her case to the EPFO.
The question of higher pension witnessed a lot of protracted controversy in India. Lakhs of members of the Employees’ Provident Fund Organisation, who want higher pension, have their ears glued to the EPFO. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
