The Employees’ Provident Fund Organisation (EPFO) issued the latest circular on May 11, 2023, clarifying how dues for past missing EPS contributions and accrued interest till date will be calculated. If there is sufficient balance in Employees’Provident Fund (EPF) account, the past dues will be transferred to Employees’ Pension Scheme (EPS) account. In case of a deficit, pensioner/employee will have to pay from their bank account. This transfer/deposit from EPF to EPS account will happen once the joint application form for higher pension is accepted by the
EPFO. Further, there will be interest clawback from the
EPF account due to this transfer.
Remember, the government via a notification dated May 4, 2023, has enhanced the employer’s contribution to the EPS account from 8.33% to 9.49% on EPS contribution above Rs 15000 per month (current wage ceiling) for those employees who are eligible to opt for a higher pension from EPS.
How dues will be calculated by the EPFO for higher pensionAs per the circular, dues that are required to be transferred to the EPS account must be calculated month-wise in the following manner: a) 8.33% of the employer’s share on higher actual pay (w.e.f. November 16, 1995, or the date the pay exceeds the wage ceiling, whichever is later)b) 1.16% of employer share on higher pay above Rs 15,000 per month w.e.f., September 1, 2014, towards increased contribution. c) All the deposit already deposited to the EPS account will be deducted from the sum of (a) and (b) mentioned aboved) The historical interest rate announced by EPFO will be taken to calculate the interest amount that must be taken back from the EPF account to recover the accrued interest on past missing EPS contributions.
What will happen once the dues are calculated?
As per the latest EPFO circular, once the total dues (missing contribution and accrued interest) from the past missing EPS account is calculated, then the field office will inform the pensioner/employee about the dues and any amount that needs to be deposited a fresh or diverted from EPF account.The information will be sent to the pensioner/employee through the last/current employer. The EPFO will inform them about the dues that have been received through the last/current employer. The information will be further provided for the amount that has to be diverted from the EPF account to the EPS account. The written consent will be taken from the employee for such transfer to take place. If the EPF account has an inadequate balance, then EPFO will inform the amount that can be diverted from the EPF account (if any) and the shortfall that needs to be deposited into the EPS account. Here also, written consent will be taken from the employee to divert money from EPF to EPS account.The EPFO will provide a break-up of the total amount that is due towards the EPS account, an amount that will be diverted from the EPF account along with interest and the amount that must be deposited by the EPF account holder along with the interest.
Time limit to deposit money/give consent for diversion
EPFO will allow three months for a pensioner/employee to deposit money and give consent for the diversion of money.
How additional money will be deposited to EPF account
The additional money will be deposited by the pensioner/employee from the bank account available in the EPFO records. To make the deposit, an online facility will be provided by the EPFO. The pensioner/employee can also issue a cheque in the favour of Regional Provident Fund Office. The cheque should have the following details on the back side:
- Application ID
- UAN/PPO number
- Name and mobile number
- Demand notice number and date
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