Keep it simple: On opting for higher pension
EPFO must simplify process for members to avail higher pension.
The move by the Employees’ Provident Fund Organisation (EPFO) to extend the deadline, for a third time, for employees and pensioners to exercise the joint option for higher pension is of limited relief, as several issues remain unresolved. As the entire process is an outcome of the Supreme Court judgment of November 2022 on the validity of amendments made in 2014 to the Employees’ Pension Scheme (EPS), the matter pertains to two categories of applicants — those who retired from service prior to September 1, 2014, and those who left service after the date and those who are still in service. Nearly 16 lakh applications have been received so far. Yet another extension cannot be ruled out. After all, it is too early to indicate that higher pension disbursal will begin this financial year, even if applicants meet all the terms and conditions. The Union Labour and Employment Ministry, which oversees the EPFO, told the standing parliamentary committee concerned early this year that the implications of the Court’s verdict on the EPS had not been factored in, while preparing the Budget estimates for 2023-24.
The most important issue of concern is the lack of clarity on the amount pension members and pensioners will receive, should their applications be accepted. Their anxiety is understandable as they — particularly those still in service — give their consent to transfer a substantial portion of their PF savings to the Pension Fund. Though pensioners will have to make payments separately to be considered eligible for higher pension, they would also be keen to know how much pension they would get. It is against this backdrop that the EPFO has sent demand letters to about 1,000 pensioners and employees for collecting arrears. As the calculator on the EPFO’s website only indicates the amount to be transferred, it is time that the EPFO gave an indicative figure of pension, at least to applicants who have been issued the letters. In the case of the pre-2014 retirees, it appears that the PF authorities have not yet officially commenced communication on the status of their applications, even though, under the rules, most of these may not stand the test of scrutiny. Employers have the Herculean task of producing physical records for every applicant. As not all establishments will have these records, the sensible option for the EPFO would be to share its database with employers for the limited purpose of establishing applicant authenticity. The situation is more complicated for establishments that are no longer in existence — there appears to be no way out for their employees and pensioners to apply for higher pension. Given that the spirit of the judgment is to provide a better social security net, the Union Ministry and the EPFO should be proactive in simplifying the process and ensuring that every deserving person gets the benefit.