EPFO issues guidelines for employees, pensioners to opt for higher pension

Source: The post is based on the article “EPFO issues guidelines for employees, pensioners to opt for higher pension” published in The Hindu on 21st February 2023.

What is the News?

In compliance with the Supreme Court’s November 2022 judgement, the Employees’ Provident Fund Organisation (EPFO) has issued instructions to all its regional and zonal offices on the manner in which employees should apply for higher pensions.

What was the Supreme Court judgement on EPFO pension scheme?

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What are the guidelines issued by EPFO?

EPFO has issued instructions to all its regional and zonal offices on the manner in which employees should apply for higher pensions.

As part of the instructions, the EPFO has now 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% of the ‘actual basic salary’ towards pension under the Employee Pension Scheme (EPS).

What this essentially means is that an employee and an employer can sign up together, requesting the EPFO to deduct 8.33% of the higher monthly basic salary, thus ensuring a larger accumulation towards pension over their work life.