The Employees’ Provident Fund Organisation (EPFO) is preparing to speed up the processing of applications for higher pensions, with revised payouts likely to begin by the end of 2025.
This move follows the Supreme Court’s November 2022 verdict allowing eligible employees to opt for higher pensions based on their full salary rather than the pensionable salary cap.
Background: Supreme Court Ruling
In a landmark ruling in November 2022, the Supreme Court allowed employees to contribute more towards their pension from their actual salary instead of the capped limit, making them eligible for a higher pension under the Employees’ Pension Scheme (EPS).
In February 2023, EPFO began inviting joint applications from employees and employers who meet the eligibility criteria.
Status of Applications
As of now, EPFO has received approximately 1.75 million applications from pensioners opting for a higher pension, about 22% of the total 7.8 million pensioners.
However, only a fraction of these applications have been processed. Around 34,500 pensioners have received revised pension orders, and another 19,000 are currently in the final processing stage.
To address the backlog, the EPFO is planning a significant ramp-up of resources. Ten to fifteen regional offices will be dedicated exclusively to handling these higher pension cases.
Additional staff, including legal experts and firms approved by the Comptroller and Auditor General (CAG), will also be brought in to assist.
Priority to State-Run and Unexempted Firms
The EPFO will first process applications from state-run enterprises and unexempted firms, where it already holds the necessary funds.
This prioritization is expected to speed up the first phase of the rollout. For the remaining applicants, timelines will depend on the completeness of the documentation and receipt of required payments.
Challenges in Processing
Several issues are slowing down the processing of claims. Nearly 102,000 applications were incomplete and had to be returned to employers for correction.
Additionally, demand letters were issued to 368,000 applicants, asking them to deposit the extra contribution required for the higher pension option.
So far, over 100,000 retirees and 47,000 active employees have complied and made the necessary payments.
Although many applications have been processed or are in the pipeline, there is growing concern about the lack of transparency regarding rejections.
The Ministry of Labour has not officially disclosed how many applications have been rejected, but estimates suggest that over 500,000 may have been declined.
This has led to calls from workers and employers for a review process to ensure no eligible applicant is left out.
Key Takeaways:
- 1.75 million applications received for higher pensions under EPS.
- EPFO to prioritize state-run and unexempted firms first.
- Over 34,500 pensioners have already received revised pension payouts.
- Special regional offices and additional staff will be deployed to speed up processing.
- Over 500,000 applications may have been rejected, prompting calls for transparency and review.
Note: We are also on WhatsApp, LinkedIn, Google News, and YouTube, to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, Google News– Click Here, YouTube – Click Here, and LinkedIn– Click Here.
