The deadline to apply for a higher pension under EPS or Employees Pension Scheme has been extended to June 26, 2023. Now, employees have enough time to decide which pension scheme is best suited to achieve their financial goals. For every employee, the benefits and results of the higher pension scheme vary greatly. Many employees believe that the only reason they need to opt for a higher pension scheme is to receive a higher monthly pension and not a lump sum maturity amount at retirement. However, there’s much more to it.
What Happens When You Choose a Higher Pension Scheme Over the Old?
When you opt for a higher pension scheme your monthly pension amount will increase while your accumulated EPF balance amount will reduce. So, choosing the higher pension scheme can significantly affect the performance of your accumulating retirement funds in an EPF account.
What is EPS-95?
To benefit the employees working in the private sector by allowing them to invest and save a small portion of their basic salary every month, the Government passed a new law in 1995. As per this law employees having a salary below or equal to ₹6,500 were eligible to make contributions and get benefits. But later, this limit was extended to ₹15,000.
So, How Can You Apply for EPS-95?
If you want to apply for higher pension benefits, then you can either directly apply on the official website of EPFO, or you can contact the HR of your organisation, where you work, to help you avail it. Your company HR will help and guide you to get registered under EPF higher pension benefits.
“On the EPFO site, one can see two options. If the employee has retired before September 1, 2014, and wants a higher pension, then he/she will have to choose the first option. Whereas if one is still employed, then he/she will have to choose the second option,” mentioned India Today.
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Applying for Higher Pension Benefit Can Affect Salary Deduction?
No, applying for higher pension benefits will not affect your monthly salary deductions. Instead, the contributions made by employers will get impacted.
