Higher pension from EPFO: Here’s step-by-step guide to apply, deadline, eligibility and more

The last date to apply for a pension on a higher salary is May 3, 2023. With less than a week to apply for a higher pension, there is still a lot of confusion and ambiguity on how to apply and how much portion of funds need to be reallocated from the EPF to the EPS in order to receive a higher pension and what employers can do if there is insufficient data available with them in terms of old wage records and other documents to cross-check the information provided by employees. 

Amid the confusion and chaos here is step by step procedure on how to apply for a higher pension from EPFO. First, who is eligible?

To whom it applies? The higher EPS scheme does not apply to all employees. It only applies to employees who were part of EPF on or before 2014. In the judgment of the Supreme Court in the case of EPFO vs. Sunil Kumar decided on 04.11.2022 only those employees who have contributed to the provident fund on actual salary i.e., over and above the statutory limit of salary (Rs 15,000) for coverage under the EPF, to the Provident Fund are eligible to claim for higher pension.

How to apply? The employees who are entitled to claim higher pensions are required to make an application online in the portal of the EPFO.  The format of the application is available online.  The portal also contains guidelines for filling up the different columns one after another. 

Step by Step guide to submitting an application for pension on a higher salary

Step 1: Visit Member E-Swea portal at https://unifiedportal-mem.epfindia.gov.in/memberinterface/. There is an option for “Pension on Higher salary click on it.”

Step 2: It will take you to another page where you need to click at “Exercise of Joint Option for employees who were in service prior to 01.09.2014 and continued to be in service after 01.09.2014 but could not exercise joint option under erstwhile proviso to para 11(3) of EPS-1995.”

Step 3: Fill in the required details to get the Aadhar-based authorization pin. For that you need to fill in your UAN, Name, DOB, Aadhaar, mobile number captcha. You will then receive an OTP on your Aadhaar-based mobile number which you need to submit for validation purpose.

Step 4: Once you validate yourself you will be directed to the third stage where you need to submit all personal and PF related details.

The page is auto filled in accordance with data available with EPFO. However, if you have worked with multiple employers all EPF accounts might not be mentioned as digitalisation in EPFO happened a few years ago only. So, for PF information not provided you have to manually enter all the details. It is recommended to download passbook or collect old salary slips for missing PF details 

You will also be needed to upload documents such as a passbook and undertaking to deposit contributions along with interest in case there is insufficient balance.

Finally, you need to accept the declaration and submit an application to move to the last stage. 

Step 5: After submitting the application, acknowledgement number will be generated which will be needed for future correspondence.  

Step 6:  After submission of the application the field officer separately will review the applications . If all requirements are met, the employers' wage details will be cross-checked with data from the field offices. If the details match, the dues will be calculated and APFC/RPFC-II/RPFC-I will issue an order to transfer/deposit the dues. If there is a discrepancy, the employer and employee/pensioner will be informed and given one month to provide the necessary information. If the employer does not approve the submitted application form/joint option, they will be given a chance to provide additional proof or correct any errors before the form is rejected. This opportunity will be given for one month and the employees/pensioners will be informed of it.

In November 2022, the Supreme Court allowed employees who missed the earlier deadline to submit fresh options within four months. The deadline has now been extended until May 3, 2023. However, the process for submitting a joint application was complicated, especially due to a mandatory requirement in the form that requests details of the option under para 26(6) of the Scheme, 1952. The Kerala High Court recently exempted this requirement and instructed EPFO to make adequate provisions in the online system for pensioners to submit options without producing copies of option under para 26(6) of the Scheme, 1952. If the online system cannot be modified, the Court directed EPFO to make necessary arrangements for filing, including allowing the submission of hard copies of the options.

Last but not least it's important to understand that upon joining the EPS scheme, a significant portion of funds will be reallocated from the EPF to the EPS in order to receive a higher pension. Therefore, it's recommended to calculate the expected pension amount at retirement and determine whether it's more beneficial to let the money grow in the EPF.  Additionally, choosing the EPS may limit your flexibility, as the EPFO only pays out a monthly pension with no lump sum option. Furthermore, only 50 per cent of that amount is given to the spouse after the subscriber's death. Therefore, whether or not to opt for the EPS should also take into account individual health and family history when considering life expectancy assumptions.

"The EPFO has now provided some initial clarity on what kind of internal process will be followed once an application for higher pension is submitted. However, in my view, this will be the first of a few clarificatory circulars that will have to be issued in this respect. From a reading of this circular, it is not clear as to whether timelines have been issued only for the employer and employee to respond to EPFO communication or whether each stage of the internal process (i.e., the process by which the application travels through various EPFO departments and culminates in an order passed by the APFC / RPFC- II) also has definitive timelines. We would also have to wait and see as to what kind of reasoning will form the basis of an order accepting / rejecting a particular application (and also how long this will take). The EPFO must also 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," said Sowmya Kumar, Partner, IndusLaw.