Deadline extension to file application for higher pension: What’s in store for employees? | Simply Save

Kuldip Kumar, an independent personal tax expert and former national leader of global mobility services at PwC India, speaks to Preeti Kulkarni on aspects that need member-employees’ attention, grey areas they need to be wary of and how to go about making the decision. Tune in for details.

Preeti Kulkarni

The Employees’ Provident Fund Organisation (EPFO) may have provided relief to employees struggling to meet the May 3 deadline for filing higher pension applications by extending it to June 26, but their woes are far from over.

The EPFO took this step after receiving representations seeking more time. It has received over 1.2 million applications. Though the timeline has been extended, the complexity of the process necessitates you complete it at the earliest.

Moneycontrol’s Preeti Kulkarni spoke to Kuldip Kumar, independent personal tax expert and former national leader of global mobility services at PwC India, to understand the nuances of the procedural aspects as well as ambiguities that make decision-making tougher.

Here are the key takeaways from the discussion:

• Process won’t end once you file the joint application. It is just the first step.

• The EPFO will verify the uploaded data and documentation once you are through and that could be a time-consuming process

• The key area of ambiguity is the method of computing higher pension. It is yet to be rolled out, which makes it difficult for employees to decide whether they should opt for higher pension.

• There is a formula and based on that, it is likely that some may be entitled to pension where the returns are much higher than current market rates.

• However, such a situation may not be financially feasible for the government, as they will pay out of their pockets.

• The EPFO has the authority to change this formula and they might do so to align returns to market rates.

• This uncertainty is why it is difficult to ascertain whether one should opt for higher pension or not.

• If you have made up your mind, first check your UAN (universal account number) and whether your Aadhaar is linked to your mobile phone; else you will not be able to access the system.

• If, during verification, the EPFO finds a mismatch in their data and the details uploaded by you, then they will inform you and allow one month to rectify the data or offer explanations.

• Some information may not tally and only time will tell how such issues will get addressed. There is no clarity on how long the EPFO will take to verify the details.

• EPFO has put in place a grievance management system, which is an online facility to file complaints. There is a specified category for filing grievances related to the higher pension option.