Ministry of Labour complies with SC’s directions regarding higher pension option

As per a press release by the Ministry of Labour and Employment, the EPFO has made arrangements for obtaining applications for validation of option / joint option from pensioners / members as per the Supreme Court order dated 04.11.2022. The process will be facilitated online. Over 12 lakh applications have been received till date. The online facility, which was to be available only till 03.05.2023, will now be available till 26 June, 2023.

The Supreme Court had first directed that opportunity be given to pensioners who had retired before 1.9.2014 after exercising joint options under paragraph 11(3) of the EPS,1995 but the joint options were rejected by the Employees’ Provident Fund Organisation (EPFO) because of the cut-off date, which was eight weeks. In compliance with this order, the EPFO had issued circular in December 2022 for filing online applications for validation of joint options by these pensioners. The last date for submission of applications was 03 March,2023. However, the last date was extended to 03 Mary,2023 which has been further extended up to 26 June, 2023 now.

The SC had also held that all members who were in service prior to 1 September 2014 and continued to be in service on or after 1 September 2014, and who did not exercise joint option due to the cut-off date, but were entitled to do so should be given another chance to exercise their option. As per the SC, the time for giving options was to be extended by a four months. Following this order, EPFO issued instructions on 20 February 2023 for online joint options to be filed by the these employees/pensioners. The deadline was 03 May 2023. However, the date has been extended to 26.06.2023.

The requirement of the members to contribute at the rate of 1.16 per cent of their salary to the extent such salary exceed Rs.15000/- per month as an additional contribution under the amended scheme was held to be ultra vires of the provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act,1952 (EPF & MP Act) by SC. The apex court then ordered the authorities to make necessary corrections in the Scheme within six months.

After examining all the legal and administrative aspects, it was decided that since the Code on Social Security,2020 (the Code ) has already been notified , it would be appropriate to bring relevant provisions of the Code into effect. The Code provides for repeal of EPF & MP Act. Accordingly, certain provisions of the EPF & MP Act get repealed while giving effect to the relevant provisions of the Code. It has now been decided to draw 1.16 per cent additional contribution from within the overall 12 per cent of the contribution of the employers into the provident fund. This provision is retrospective in nature in line with the directions given by the SC. To implement the same, the Ministry of Labour & Employment has issued two notifications on 3 May,2023, complying with all the directions of the SC.