EPFO
Lack of clarity among EPFO subscribers regarding the necessary documentation and the process for computing the transferable amount
- Updated Apr 30, 2023, 11:28 AM IST
Although the deadline to apply for a higher pension from the Employees Provident Fund Organisation (EPFO) is May 3, 2023, there is still a lack of clarity among individuals regarding the necessary documentation and the process for computing the transfer amount from EPF to the Employees’ Pension Scheme (EPS) if they choose to opt for a higher pension.
“There is no clarity with regard to the procedure which will be adopted by the PF authorities for transferring the amount from the PF fund to the Pension fund and also the method for calculating the amount to be transferred from the PF fund to the Pension fund. PFO has not clarified these points and hence, there is total confusion among the claimants,” said BC Prabhakar Advocate and President of Karnataka Employers’ Association.
Sowmya Kumar, Partner, IndusLaw said, “The EPFO must provide some guidance on what employers can do if there is insufficient data available with them in terms of old wage records and other documents. There is also no clarity yet on how the transferable amount will be calculated from EPF to EPS if one opts for pension on a higher salary.”
The Supreme Court by its November 2022 order ruled that employees who were part of the EPF before or on 01.09.2014 but could not apply for higher pension, can now submit fresh options within a period of four months which has now been extended up to May 3, 2023. However, the process for submission of joint application by the employees was extremely complicated particularly a mandatory requirement in the form that required furnishing details of the option under para 26 (6) of the Scheme, 1952. Clause 26(6) allows employees to jointly request with their employer to contribute a higher amount to the fund, exceeding Rs.15,000, to claim a higher pension. The ceiling of Rs 15,000 was introduced in the EPS Scheme in 2014.
The Kerala High Court while recognising the enabling nature of Clause 26(6) and the proximity of the cut-off date i.e. May 3, 2023, directed the EPFO to make provisions in the online facility to furnish options without production of the document under Clause 26(6).
“The Kerala High Court has exempted this mandatory requirement and directed the EPFO that adequate provision should be made in the online facility to enable the pensioners to furnish the options without the production of the copies of option under para 26 (6) of the Scheme, 1952. The Court further directed that if the online facility cannot be altered, then necessary arrangements for filing including granting permission to submit hard copies of the options be made,” Himanshu Sachdeva, Senior Associate, TAS Law told Business Today.
However, the expert said the EPFO has not issued any further direction after the stay order of the Kerala High Court was passed. “On the contrary, in their internal circulars addressed to their Field officers on 23.04.2023, have reiterated that submission of joint option under para 26(6) of the EPF Scheme is a mandatory requirement. The main problem being encountered by the pensioners who are entitled to claim a higher pension in terms of the judgment of the Supreme Court in the case of EPFO vs. Sunil Kumar is the joint option under Section 26(6) of the EPF Scheme,” said Prabhakar.
Published on: Apr 30, 2023, 11:28 AM IST