[ad_1]
EPFO High Pension Deadline: EPFA’s Higher Pension Scheme (Pension Scheme) has been in headlines for the past several months. Since the decision of the Supreme Court regarding the facility of more pension in November last year, it is being discussed continuously.
The Employees’ Provident Fund Organization (EPFO) has extended the deadline for opting for higher pension under the Employees’ Pension Scheme (EPS) multiple times, and now it is just around the corner. Now EPFO has told how the excess pension will be calculated. Let’s try to understand it…
Ministry of Labor told this
Earlier last month, the Ministry of Labor had also issued a clarification regarding the calculation of excess pension. The labor ministry had said that out of the total 12 per cent employer’s contribution to PF, an additional contribution of 1.16 per cent would be used to calculate the higher pension, in line with the Supreme Court’s November 4, 2022 judgement. Along with this, the Ministry of Labor had also told that this step to reduce the burden on the subscribers of the Employees’ Pension Scheme will be retrospective, that is, this decision will not be applicable from the day of its arrival, but from the previous days. ,
This is how pension will be calculated
Now EPFO has explained this in detail. EPFO has said that for those who retired before September 1, 2014, the pension will be calculated on the basis of average monthly salary up to 12 months before the date of retirement or exit from the pension fund. On the other hand, those who will retire after this date, will be calculated on the basis of average monthly salary of 60 months before retirement.
so many days left
The deadline for opting for higher pension was ending on 03 May. EPFO had extended it till 26 June 2023. Its deadline was extended for the second time. First of all, in an order given on 4 November 2022, the Supreme Court had fixed a deadline of 3 March in this regard. The EPFO had then extended the deadline till May 3 to opt for the higher pension. Now its deadline is ending on June 26.
From here the money will go to the pension fund
The Ministry had told that along with the Employees’ Provident Fund and Other Provisions Act, the Social Security Code states that contribution cannot be taken from the employees for the Pension Fund. Keeping this in mind, it has been decided that an additional 1.16 percent will be taken from the 12 percent contribution of employers to the Pension Fund, which is going to the Provident Fund.
Salary in hand will not be affected
Let us tell you that the employee does not make any contribution in EPS. Of the total 12 per cent contribution made by the company, only 8.33 per cent goes to the EPS. Whatever amount exceeds this in the contribution of the company, it goes to EPF. The Ministry of Labor has clarified that the increased contribution to EPS will also go from the company’s share, ie even if you opt for higher pension, there will be no impact on take home salary or in hand salary.
there will be loss
Although it also has disadvantages. If you opt for higher pension, the amount deposited by the company in PF will be less, which will affect your PF fund. Employees get the benefit of compound interest in PF. Now since part of PF will go to EPS, the benefit of compounding will also be less. Similarly, the lump sum amount that is received from PF on retirement or already leaving the job, this amount will also be affected if the option of higher pension is selected.
[ad_2]
Source link
