Tomorrow is the last day to apply for higher pension! Will EPFO extend deadline amid portal bugs, pending clarifications?

Tomorrow is the last day to apply for a pension on a higher salary. The previous deadline was March 3, 2023, which was later extended to May 3, 2023. But given the procedural hassles and no clear guidance from the Employees’ Provident Fund Organisation (EPFO) on how the reallocation of funds will be done to adjust past contributions, experts demand that the deadline be extended again. Even if the date is not extended, experts say applicants may approach the Court for an extension on grounds of portal bugs, pending clarifications etc.

“The portal had certain bugs due to which a number of applicants faced problems in submitting their applications. Also, EPFO is yet to provide clarifications on certain pending issues due to which certain applicants may not be able to decide whether to opt for the scheme or not. Under these circumstances, there seems to be a high probability that the date will be extended. Even if the date is not extended, we should not be surprised if we see applicants approaching the Court for an extension on grounds of portal bugs, pending clarifications etc,” said Apeksha Lodha, Partner, Singhania & Co.

In addition, in 2014, the EPFO issued a notification requiring employees who opted for EPS contribution above the wage ceiling of Rs 15,000 to pay 1.16 per cent of their basic salary above Rs 15,000 towards the pension scheme. The Supreme Court, however, declared the 1.16 per cent of the contribution as invalid and observed that the requirement of the members to contribute at the rate of 1.16 per cent of their salary to the extent such salary exceeds Rs 15,000­ per month as an additional contribution under the amended scheme to be ultra vires the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act.

“EPFO is yet to provide clarification on 1.16 per cent of the contribution from the basic salary provided by the employees having salary of Rs 15,000. Further, the Apex Court had already provided 6 months of timeline to the EPFO to make adjustments in the scheme so that the additional contribution can be generated from some other legitimate source within the scope of the Act, which could include enhancing the rate of contribution of the employers,” said  Kanjani Sharma, Associate, TAS Law.

Till date there are no clarification from the EPFO regarding the same. Sharma said there could be a possibility that the deadline may be extended further to enable more clarity. Such an extension would rather be beneficial for EPFO otherwise it may seem them to be flouting the order of the Apex Court of the country.

The Supreme Court by its November 2022 order ruled that employees who were part of the EPF before or on September 1, 2014 but could not apply for higher pension, can now submit fresh options within a period of four months which later got extended up to May 3, 2023. However, the process for submission of joint application by the employees was extremely complicated, including 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 Kerala High Court while recognising the enabling nature of Clause 26(6) and the proximity of the cut-off date directed the EPFO to make provisions in the online facility to furnish options without production of the document under Clause 26(6). 

With less than a day available to apply for a higher pension under EPS and several modalities still required to be worked out, an expert said that an extension may be deemed imminent. 

“The PF commissioner has to specify the format for eligible employees to submit an application. Moreover, for the submission of the request for a higher pension, a dedicated online window would be needed. To add to the task, the collection and submission of a range of documents such as an undertaking to allow the transfer of funds from a provident fund to the pension fund and proof of the employer's share in the provident fund on higher wages have to be submitted by the eligible employee," said Aashwyn Singh, Associate, SKV Law Offices.

"It has not been confirmed as of now, however, the EPFO may further extend the deadline. Even though the deadline had been extended, there still remain certain unattended issues which direly need clarity by the EPFO, such as the clarification regarding retirement fund body with respect to the replacement mechanism for the additional 1.16% EPS contribution by employees that was struck down by the Supreme Court. Further, other issues like the computation of pension and calculation of the additional dues which an individual needs to pay, need to be handled beforehand so as to smoothen the decision-making process. Given all these aspects to be taken care of, it is likely that the EPFO may further extend the deadline and provide the much-needed clarity on the same," said Sandeep Bajaj, Managing Partner, PSL Advocates & Solicitors. 

Also read: Higher EPFO pension: Here's how monthly pension and corpus reallocation from EPF to EPS will be calculated

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