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ARTICLE · 07 MAY 2023

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Breaking Down The EPFO Circular On Higher Pension

Pioneer Legal
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Over the years, the pensionable salary was altered vide various amendments to the EPS.

IndiaEmployment and HR
Sanket Jain
Sanket Jain
Pavana Padmakumar
Pavana Padmakumar
Aastha Arora
Aastha Arora
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Background:

In 1995, through an amendment to the Employees' Provident Fund Act, 1952 ("EPF Act"), Section 6A of the EPF Act introduced a scheme named the Employees' Pension Scheme, 1995 ("EPS"), for governing the terms of employees' pension. As per the EPS, a part representing 8.33% of the Employees' Provident Fund ("EPF") contribution to be made by the employer as per the EPF Act is required to be remitted into the 'Employees' Pension Fund' formed in accordance with Section 6A of the EPF Act and the EPS.

Over the years, the pensionable salary was altered vide various amendments to the EPS. Prior to the 2014 Amendment (as defined below), the maximum pensionable salary was INR 5,000 per month, which was later increased to Rs 6,500. However, the EPFO gave 6 months for the employees to file a joint option form for higher pension contributions to the EPS ("Earlier Option"). Thereafter, through an amendment to the EPS which was effective from September 1, 2014 ("2014

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