The Supreme Court judgement dated November 4, 2022 provided the option to the eligible employees to opt for higher pension by contributing to EPS on higher/ uncapped salary. As per the above judgement, the eligible, existing employees wishing to opt for higher pension, would have to make higher (differential) contributions to EPS over their past service, by redirecting funds from their PF accumulations.
Further, the online facility to exercise the above option was launched on February 26, 2023 and was open until May 03, 2023, however considering the representation of the employees, the time limit was extended upto June 26, 2023 in order to give a complete 4 months window to the eligible pensioners to apply for the said option.
In view of the above, EPFO did receive around 16.6 lakh application till June 26, 2023 and further decided to provide a final extension of 15 days to the eligible pensioners to submit their application online in order to remove any difficulty faced by the eligible pensioners while applying for higher pension. Accordingly, the timelines to submit the application for the employees has been extended up to July 11, 2023.
Also, considering the request received from many representations from the Employers’ and Employers’ association to extend the timelines to upload the wage details of the eligible pensioners, EPFO has decided to further extend the timelines for the employers to upload the wage details etc. by September 30, 2023.
WTW recommends that employers assess the financial implications of this option and prepare for its implementation. This includes conducting employee awareness sessions, drafting employee communication material and providing a pension calculator to enable employees to make an informed choice. WTW and its team of actuaries and pension experts, are available and will be happy to support you as required.
We will continue to monitor this space and share more updates when available. Please feel free to reach out to your WTW consultant or write to WTWIndia@wtwco.com for any questions or guidance around understanding the impact of this judgement.
