03-11-2023
Dear friends, greetings to all.
The latest news on pension Applications and calculations of higher pension on actual salary is posted for your information.
Published in the Business Today.
G.Murugaiyan President, JAC.
Higher pension: EPFO sends out nearly 33,000 letters seeking Rs 1,947 crore
This is seen as the start of the actuarial analysis of the impact of higher pension on EPS
SUMMARY
- Every 50,000 demand letters to be sent to actuary for analysis
- Planning to set up an actuarial cell at the head office Has scrutinised 629,000 applications out of 1.74 million received
- The Employees’ Pension Fund Organisation (EPFO) has sent letters seeking nearly Rs 2,000 crore from applicants seeking higher pension, which is also being seen as the beginning of the process of understanding the financial implications of the Supreme Court ruling.
- As per recent data available, the EPFO has issued 32,951 demand letters for a total of Rs 1,974 crore from applicants seeking higher pension following the Supreme Court decision in November 2022. Applicants who submit the money would be eligible for higher pension.
- In the recent meeting of the EPFO’s Central Board of Trustees, the retirement fund manager also highlighted that the speed of processing these applications is time consuming.
- The CBT, which is the apex decision making body of the EPFO, was also informed that the actuarial analysis or study can be completed only after all the applications are disposed off. The EPFO has already sent out these letters to the consultant Actuary who will undertake actuarial work related to impact of Supreme Court ruling.
- The EPFO is understood to be already examining the first financial impact as calculated by the Actuary based on certain assumptions. However, the actuarial analysis shall continue as an ongoing exercise and will be carried out for every 50,000 demand letters that are issued. This will be followed by a final consolidated evaluation after all the cases are finalised.
- For this purpose, the EPFO is also planning to set up an actuarial cell at its head office that would ensure realistic assumptions and proper actuarial examination of reports received from the valuer or consultant actuary.
- In all, the EPFO has received 17.49 lakh applications for higher pension, of which it has scrutinised 629,000 forms. In about 527,000 forms, it has also written to the employers seeking additional details or correction of anomalies. It has also rejected about 3,618 forms.
- Previously, the EPFO had also released a calculator facility for members to calculate the money that they would have to deposit to receive higher pension under the Employees’ Pension Scheme. According to officials, there is no separate formula in the EPS 1995 for members who will be eligible for pension on higher wages.
- The same methodology of pro-rata determination of pensionable salary taking average monthly pay drawn during contributory period of service in the span of 60 months preceding the date of exit from the membership of the pension fund for post September 1, 2014 retirees will be used for calculation of pension on higher wages,” explained a source.
- Where the due amount is available in the PF account maintained at EPFO, only a diversion shall be required. However, where the due amount is not available with EPFO the same will have to be deposited by the member directly or through the employer.