EPFO launches calculator for higher EPS pension additional contribution after much delay Read on to know how you can download it and how it can be used to estimate the money that you have to pay
Employees can now calculate the money they have to pay to receive a higher pension from the Employees’ Pension Scheme (EPS). The Employees’ Provident Fund Organisation (EPFO) has released the Excel utility-based calculator to estimate dues that one has to pay either from their EPF balance or their own savings if required.It is important to note that the last date to apply for a higher pension is today i.e., June 26, 2023. Though online application for a higher EPS pension was active for a few weeks, however employees opting for a higher pension were not sure how much they would need to pay to become eligible for a higher pension. The EPFO has now launched a calculator to make it easier for employees to do their calculations.
Along with the calculator, the retirement fund body has also released a set of FAQs for those who are eligible to apply for higher pension.
Also Read: EPFO releases FAQs for higher EPS pension
How to download EPFO’s Excel calculator for higher pension
An employee can get this calculator from the Member Sewa portal of the EPFO, by clicking on the pension application link. The calculator is available under the ‘Important links’ head.
How an employee can use this Excel calculator for higher pension?
To use this calculator, an employee needs to know the date of joining the Employees’ Provident Fund (EPF) scheme. An employee needs to enter the wage amount from the date of joining the EPF scheme or November 1995, whichever is later.An employee needs to enter the wage details till the date of retirement or till February 2023 - whichever is earlier. Once all the wage data is entered into the sheet, it will calculate the additional EPS contribution that one has to pay to make up for the shortfall from the date of joining the EPS to the date of retirement/till date, as the case may be.
Along with this, the excel based utility will calculate the total interest accrued till March 31, 2023, on this missing contribution at the historical EPF interest application for the concerned months. Both these amounts will be recovered from the employee's EPF account, provided it has sufficient balance, and transferred to the EPS account.The third tab in the Excel calculator shows the summary of the total amount that will be transferred from the EPF account along with the interest to the EPS account. It has the following heads - total wages, difference of contribution, interest and total.
The government notified on May 3, 2023, that additional contributions of 1.16% will be taken from the employer’s contribution to the EPF account. Under the EPF scheme laws, both the employee and employer make a contribution of 12% of the basic salary to the EPF account. The employee’s 12% share goes to the EPF account. Out of the employer’s 12% share, 8.33% goes to the EPS account (subject to wage ceiling limit) and the balance of 3.67% goes to the EPF account.
However, for those opting for a higher EPS pension, an additional 1.16% of the actual basic salary above the wage ceiling (currently Rs 15000) amount will go to the EPS account. Hence, a total of 9.49% of the basic salary above Rs 15000 from the employer’s contribution will go to the EPS account for the higher pension. This means that till Rs 15,000 wage ceiling, a contribution of 8.33% will go to the EPS account. For wages exceeding Rs 15,000 (say Rs 25,000), 9.49% of Rs 10,000 (Rs 25,000 minus Rs 15,000) will go to the EPS account.
The final tab of the calculator shows the summary of the amount that either be refunded or diverted to/from the EPF account.
Employees got option for higher pension via Supreme Court judgement
Facility for higher pension application was necessitated after the Supreme Court order dated November 4, 2022, allowed eligible employees to receive a higher pension based on their actual salary. Earlier, the EPS contribution was typically made only upto the prevailing wage ceiling, which is currently Rs 15000. However, after this SC judgement, to be eligible for a higher EPS pension, employees are also required to contribute to EPS at a higher rate on the basis of their actual salary not only in future but also for past missing contributions along with accrued interest at the historical EPF interest rate.
But the calculation of this total amount was a major pain point for most of the employees. Now with this calculator and their past EPF/EPS statements, they would be able to calculate this amount which will help them in taking an informed decision about higher pension applications.
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This story originally appeared on: India Times - Author:Faqs of Insurances
