The Employees' Provident Fund Organization (EPFO) has once again taken the initiative to extend the deadline for the option of acquiring more pension under the Employees' Pension Scheme (EPS). The previous deadline was scheduled to end today, i.e., on 3 May, but the duration has now been extended for about two months. This commendable decision is expected to benefit those individuals who were willing to opt for a scheme that offered more pension, but couldn't do so due to some reason or the other. As a result, such subscribers now have ample time to choose their preferred option.
It's worth noting that this is the second time the deadline has been extended. The Supreme Court initially set the deadline till 3 March in this regard in an order given on 4 November 2022. EPFO subsequently extended the deadline until 3 May to allow interested subscribers to opt for higher pension. However, the deadline has been pushed even further, and after the most recent change, subscribers can now choose the higher pension option until 26 June 2023.
The deadline extension is attributable to the fact that the EPFO took a long time to restore the online application facility for eligible employees after the Supreme Court set the deadline in its judgment. The facility was eventually reinstated in February, by which point three months had already passed since the deadline was established. It is believed that many employees have not been able to make a decision, and this is why the deadline has been extended, giving them ample time to make an informed choice.
The Employees Pension Scheme used to be availed by only a handful of people until a few years ago. Initially, only government employees were eligible for this scheme. However, the government later expanded this scheme, allowing those employed in the private sector to benefit from social security. This change took place in 1995, and as a result, the scheme is also referred to 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 covered under the EPF. However, there was a condition that only employees with a basic salary and DA of Rs 15,000 per month would be entitled to the EPS benefit.
In the EPS, the employee does not contribute any amount on their behalf. Only 8.33 per cent of the total 12 per cent contribution made by the company goes to EPS. Since the pensionable salary limit is 15 thousand, the EPS contribution also gets limited to Rs 1,250. Any amount that exceeds this contribution from the company goes to EPF. As the increased contribution to EPS is also from the company's share, it won't affect the take-home salary even if you opt for a higher pension.
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