1. The EPFO has activated the employer’s portal to upload the employee’s details and approve or reject the application submitted by the employee.
2. Cutoff Date: The last date to apply for a higher pension under EPS 95 scheme is extended till 26th June 2023. It is not the cut-off date for employers. In a petition filed by the Employees Association with Hon’ble Kerala High Court dated 28th April 2023, it was submitted by EPFO that the cut-off date of 03.05.2023 (now 26.06.2023) is not for the approval of joint option by the employers.
3. The employer has to do a lot of exercises in order to consider approval for a higher pension option. The first step is to do a month wise calculation of the differential amount, along with interest, for each employee. The period for such calculation will be with effect from 16th Nov 1995 (or the date of joining, whichever is later) till the date of retirement.
3.1 The format, and data structure for all the required details, has been provided in the help file for the purpose. The details to be uploaded are broadly classified in 8 columns as tabulated below.
4. DETAILS TO BE UPLOADED
Column No. | Heading | Remarks/ Description |
1. | Members ID | This is the PF Number/ ID provided by the employer to the employees (This is not the UAN Number) |
2 | Salary Month | All the months (in MMYY format) from 16.11.1995 (or the date of joining whichever is later) to the date of Exit |
3. | Salary Details | Month-wise details of salary (Basic +DA) on which PF contribution was made by the employer |
4. | EPS on actual salary | EPS contribution @ 8.33% on actual salary (indicated in column 3) |
5. | Employers’ contribution @ 1.16% on salary | 1.16% on (amount in Column 3 – Rs 15000) to be calculated from 01.09.2014 onwards only.
For employees who have already superannuated (attained the age of 58 as of date) before Sep 2014, the amount will be 0″ Zero” |
6. | EPS contribution made earlier | EPS contribution (Rs 417 / 541/ 1250) by the employer on a capped salary of Rs 5000/6500/15000 respectively |
7. | Differential amount, including interest to be paid | The amount at column (4+5-6) plus interest thereon. |
8. | PF Interest Rate | PF Interest rate by the exempted establishments to their employees. This column is optional |
4. It is recommended to do calculations in an Excel file & prepare the statement, before converting it to text & uploading the same on the EPFO portal. Let us try to understand the calculation with the help of an Illustration.
4.1 Illustration: Mr. Anupam joined the organization on 5th June 1995 and will attain the age of 58 in June 2024. The differential amount payable by Mr. Anupam will be calculated as follows:
MMYY(1) |
Salary(2) |
EPS on actual salary @ 8.33%(3) |
1.16% on Actual Salary (column 2-15000)(4) |
Total Payable(5)= (3+4) |
EPS Contribution made earlier(6) |
Differential Amount(7)=(5-6) |
Cumulative differential amount(8) |
Interest on the cumulative differential amount (assuming the rate is 8.5%)(9) |
Differential Amount including Interest10=(7+9) |
1195 |
10000 |
833 |
0 |
833 |
417 |
416 |
416 |
3 |
419 |
“ |
“ |
“ |
“ |
“ |
“ |
“ |
“ |
“ |
“ |
0914 |
25000 |
2083 |
116 |
2199 |
1250 |
949 |
1365 |
10 |
959 |
“ |
“ |
“ |
“ |
“ |
“ |
“ |
‘ |
“ |
“ |
0523 |
60000 |
4998 |
522 |
5520 |
1250 |
4270 |
5635 |
40 |
4310 |
5. Salient Points to remember for calculating the differential amount above:
5.1 Period for Calculation: Mr. Anupam Joined in June 1995 but the calculation will be w.e.f. 16th Nov 1995 (the date of commencement of the EPS 1995). The first-month salary will be for the 15th day (16th Nov- 30th Nov 1995 only).
5.2 Salary: The salary includes Basic + Dearness Allowances only. No other allowances or perquisites will be part of the salary for the purpose.
5.3 Additional Contribution of 1.16% on Salary: Prior to Sep 2014, the government was contributing 1.16% of basic salary above Rs 15,000 as a subsidy for a contribution towards Employees’ Pension Scheme (EPS).
5.3.1 EPFO vide notification in 2014 made it mandatory for employees opting for EPS contribution, to pay 1.16% of basic salary above Rs 15,000 towards the pension scheme.
5.3.2 The Supreme Court (SC) declared this 1.16% additional contribution invalid on November 4, 2022, and asked the EPFO to work out alternatives. The Supreme Court had directed the authorities to make necessary adjustments to the Scheme within a period of six months.
5.3.3 Now, EPFO vide GOI dated 03.05.2023 confirmed that an Additional contribution of 1.16 percent of basic wages for subscribers opting for higher pensions will be managed from employers’ contributions to social security schemes run by retirement fund body EPFO.
5.3.4 This will have adverse implications on the total provident fund accumulation and pension amount at retirement.
6. Interest on differential amount: The interest on the differential amount will be calculated in the same manner as is being paid by the EPFO on the PF balance. The prevailing rate of interest will apply to the cumulative monthly balance.
7. Conversion of Excel File in Text File: The Excel file needs to be converted into a text file in the following manner:
(a) Remove all the Header & Footer and keep the line items only.
(b) Save the Excel sheet as CSV (comma delimited). CSV file.
(c) Open the CSV file in Note Pad
(d) Replace the comma with #~#. This can be done with the edit option at Note Pad.
(e) Save the text file
(f) Upload the text file in the portal as a Joint option approval file.
8. Approve / Reject the File
8.1 Login to the portal and click on POHW Tab
8.2 Click on Choose file and upload the saved text file. If there is no error, the following screen will be displayed
8.3 The file can be approved by using DSC or e-sign.
9. Application Process at EPFO: The approved applications submitted by the employer will be examined at EPFO. The wage details submitted by the employers will be verified with the details available with the EPFO.
9.1 The cases where the details provided by the employer match the details available with EPFO, the dues will be calculated and the order will be passed.
9.2 The cases where there is a mismatch in details uploaded in the Portal by the employee and the details available with EPFO, the same will be informed to the employer and the employee/pensioner by the EPFO and one month time will be given to complete/ correct the information.
9.3 In a case where complete information is not provided in the application and has been vetted and approved by the employer: – The EPFO will seek information from the employer under intimation to the employees/ pensioners within one month. In case the complete information is not received, EPFO will pass the relevant order.
10. Challenges with Employer: The digging out historical salary details of serving/Exit employees itself is a big challenge. It is possible only with lot of hardship and joint efforts of respective employees to extract the details required for the purpose.
10.1 The another big challenge with employer is to calculate the interest accumulated on the differential amount for each wage month.
10.2 On the top of it, the requirement to incorporate the additional contribution of 1.16% on the PF salary exceeding 15,000 per month can make this calculation quite complicated.
10.3 The preparation of files in Excel & converting them into text files is another challenge for employers. It would have been better if the EPFO provide an Excel utility with the formula for calculations.
11. The guidelines & clarity on other crucial issues like pension calculation formula, interest on pension arrears etc are still awaited from EPFO.
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Disclaimer: The article is for educational purposes only.
The author can be approached at caanitabhadra@gmail.com
Also Read:
EPS 95 – Rectification / Deletion of Online Application Submitted For Higher Pension
EPS 95 Higher Pension Application – Validation Process by Employer / EPFO
EPS 95 – Higher Pension Permission Under Para 26(6) of EPF Scheme
EPS 95- Procedure to Apply Online for Higher Pension
EPS 95- Higher Pension – Frequently Asked Questions
EPS 95 – Higher Pension Vs EPF – Comparative Analysis