Over one lakh employees opt for higher pension under EPS 95
Over one lakh employees have opted for higher pension under the Employees’ Pension Scheme 1995 (EPS-95) till March 9 this year. The Centre informed the Rajya Sabha on Thursday that 1,20,279 employees have submitted joint options for higher pension at the Employees’ Provident Fund Organisation (EPFO) portal.
In November last year, the Supreme Court (SC) had asked the EPFO to give four months to subscribers and pensioners to contribute on their actual salaries towards EPS-95.
The EPFO has last month allowed subscribers to go beyond the pensionable salary capped at Rs 15,000 a month on which employers deduct a sum equal to 8.33 per cent of the ‘actual basic salary’ towards pension under the EPS.
Also read: EPFO sets May 3 as deadline for subscribers to opt for higher pension
Total number of beneficiaries
Rameswar Teli, minister of state in the Union labour ministry, said the total number of beneficiaries of the SC judgement will depend on how many employees exercise the joint option as well as on the number of eligible employees.
He was answering to a question by Communist Party of India (Marxist) MP John Brittas.
The minister clarified that the joint option for pension on higher wages is available to only those employees where employee’s and employer’s contributions were on actual salary exceeding the prevalent wage ceiling and who did not exercise the joint option under the para 11(3) of the pre-amendment Employees’ Pension Scheme (EPS), 1995, prior to September 1, 2014, and continued to be members of the scheme.
EPFO instruction
In a February 20 circular, the EPFO had instructed its field officers to allow option for higher contribution by those employees and employers who had contributed on salary exceeding the wage ceiling of Rs 5,000 or 6,500 and those who did not exercise joint option while being members of EPS 95. It was also mandatory that the those who opt for higher pension were members of EPS prior to September 1, 2014 and continued to be a member on or after that date.
The EPS, administered by the EPFO, provides employees with pension after the age of 58. Both the employee and the employer contribute 12 per cent of the employee’s basic salary and dearness allowance to the EPF. The employee’s entire part goes to EPF, while the 12 per cent contribution made by the employer is split as 3.67 per cent contribution to EPF and 8.33 per cent contribution to EPS.
Also read: Select Central govt employees given option to opt for old pension scheme
Apart from this, the Government of India contributes 1.16 per cent as well for an employee’s pension. Employees do not contribute from their share of PF towards the pension scheme.
