Good news for EPFO subscribers

For the past few days we have all been hearing news about EPFO, regarding the increase in pension, In this blog, we will explain to you the whole scenario and will also explain your eligibility for this higher pension.

What is EPFO’s higher pension scheme in 2023?

In short, an amendment came in 2014, which increased the pension amount to Rs.15000/- a month from the limit of Rs.6500/- a month, but many people were not aware of this change, and due to lack of information, they were not able to subscribe for it. A case regarding this issue was filed in the court named EPFO versus Sunil Kumar B. The respected court after analyzing the issue gave an order which lead to an extension in the date of the subscription till 3 May 2023.

Eligibility and Non-Eligibility:

The beneficiaries or the people affected fall into the following categories, based on the cut-off date which is 1 September 2014

1 Category – Those employees who have become part of EPFO after 1 September 2014 either because they started their career after September 2014 or have become part of such organization who is liable to deduct EPF after September 2014 are “NOT ELIGIBLE” for this scheme or benefit.

2 Category – Those people who were members before September 2014 and such person is either retired or are in service after, but missed the opportunity, for these people time limit has been extended by the court till May 3, 2023

3 Category – An employee who retired before 1 September 2014 and did not opt for a higher pension scheme, now a such person cannot opt for higher pension scheme

4 Category – Those people who were members before September 2014 and such a person is either retired or is in service after and had opted for a higher pension scheme under previous options are eligible for higher pension.

How pension will be calculated:

For the purpose of pension, a person who has attained the age of 58 Years is eligible for retirement, and the calculation will be based on the average of the last 60 months of salary of that person, the answer will be multiplied by the number of years for which contribution was made and the sum of which is to be divided by 70.

Will my in-hand get affected after opting for a higher pension?

The answer to this question is NO, only there will be a change in the employers’ contribution toward an employee, a certain percentage of 3.67 from the overall12% contributions will go to the PF account, and the remaining 8.33% will be contributed towards Pension Fund

Note – Investments are subject to market risk, conduct research and apply discretion before investing