EPFO Higher Pension Scheme: EPFO has once again given a big relief to the people regarding the higher pension scheme i.e. EPS-95. EPFO has extended its deadline once again.
Employees’ Provident Fund Organization (EPFO) has once again extended the deadline for the option of getting more pension under the Employees’ Pension Scheme (EPS). Earlier its deadline was ending today i.e. on 03 May, but now it has been extended for about two months. This will benefit those people who wanted to opt for a scheme with more pension plan, but could not do so due to some reasons. Now such subscribers have got more time to choose the preferred option.
Now the chance to choose till this date
Its deadline has been extended for the second time. First of all, in an order given on 4 November 2022, the Supreme Court had fixed the deadline till 3 March in this regard. EPFO had then extended the deadline till May 3 i.e. till today to choose the option of getting more pension. Now it has been pushed further. After the latest change in the deadline, interested subscribers can opt for higher pension till June 26, 2023.
Due to this the deadline has increased
For the first time when the Supreme Court in its judgment had set the deadline after 4 months, it took a long time for the EPFO to restore the online application facility for the eligible employees. EPFO started this facility in February. That is, after the Supreme Court had fixed the deadline, three months had already passed. This is the reason that for the first time EPFO decided to extend the deadline in March. For this reason, the reason for extending the deadline is believed to be that there are still a large number of such employees, who have not been able to take a decision. In such a situation, these employees have now got more time to take a decision after understanding it well.
This is how the scheme started
Till a few years ago very few people used to get the benefit of the Employees Pension Scheme. Earlier only government employees could take advantage of this. However, later the government expanded this scheme and those working in the private sector also started getting the benefits of social security. This change took place in the year 1995 and for this reason the scheme is also known as EPS-95 i.e. Employees Pension Scheme-1995. Since EPS was introduced under the Employees’ Provident Fund Act, its benefits started reaching every employee who was covered under the EPF. However, there was a condition in this that the employees whose basic salary and DA is Rs 15 thousand per month, only they will get the benefit of EPS.
This is how you get more pension
In EPS, the employee does not make any contribution on his own behalf. Out of the total 12 per cent contribution made by the company, only 8.33 per cent goes to EPS. Since the limit of pensionable salary is 15 thousand, due to this the contribution of EPS also gets limited to Rs 1,250. Whatever amount is more than this in the contribution of the company, it goes to EPF. Now since the increased contribution to EPS is also from the company’s share, it means that there will be no impact on take home salary or in hand salary even if you opt for higher pension.
Disadvantages of this scheme
By opting for EPS-95, you will get a little more pension after retirement, but the lump sum amount of PF will be reduced. The second disadvantage is that employees get the benefit of compound interest in PF. Now since part of PF will go to EPS, the benefit of compounding will also reduce. Another major disadvantage of opting for EPS-95 is that you cannot retire early. Its benefit is available only to those people, who either work till the age of 58 or for at least 10 years. Comparatively less interest is also available in EPS. Apart from this, there is another benefit in case of mishap. If something untoward happens to you, then the entire EPF amount goes to your nominee. On the other hand, in the case of EPS, the nominee gets the benefit of half the pension only.
