Rules for EPS pension members with multiple accs

The Employees’ Provident Fund Organisation (EPFO) has reaffirmed the rules to be followed when Employees’ Pension Scheme (EPS) members have several account numbers for concurrent employment in a circular dated January 29, 2024.

The EPFO has specified the directions that must be brought to the knowledge of all such establishments where the incidence of multiple memberships is more by the concerned ROs, so that in the first instance, the employers submit proper ECRs.

The individual must be a member of the Employees Provident Fund Organisation (EPFO). To earn the pension benefit under EPS, one must complete 10 years of service and have attained the age of 50 to get an early pension.

The following procedures must be undertaken if an EPS member has several account numbers for concurrent employment, simultaneously at two or more establishments, according to the EPFO circular dated January 29, 2024.

· Pension from each establishment has to be worked out at the date of exit on actual basis.

· Pension payable from all establishments shall be aggregated provided that aggregate of pensionable salaries at any point of time shall not exceed wage ceiling and as & when it exceeds wage ceiling the contribution received on such excess salary shall be diverted to the PF account.

· The minimum pension criteria will be applied to aggregated pension i.e., only on the total pension amount.

The circular further stated that, “When a member becomes member of EPS on account of his wages on the date of joining being not more than the wage ceiling of Rs.15,000/-, upon his joining another establishment without exiting from the first establishment at a later date, the RO where the other establishment is covered shall be responsible to ensure that total contribution into EPS shall not exceed contribution payable on wage ceiling of Rs.15,000.”

“Further, it shall be ensured that w.e.f. 01.09.2014, if the wages in a single establishment exceeds Rs.15,000/- or aggregate of wages at the time of joining exceeds Rs. 15,000/- in multiple establishments (concurrently & simultaneously), the full 24% PF contribution shall be retained in Provident Fund account only, as in such cases, the member shall not be eligible for membership of EPS, 1995.”

As with other circumstances, the RO will compute the pension and issue the PPO after the person quits the EPS, 1995. Similarly, if there are two overlapping memberships, the RO where the member joined later must comply with the RO where the other establishment is covered in order to ensure that the total contribution to EPS does not exceed the contribution payable on the wage ceiling of Rs.15,000 (as per Paragraph 3 of the circular).

Important FAQs related to EPS

How will member pensionable salary be calculated for members of EPS, 95 eligible for pension on higher wages who retired prior to 01.09.2014, where the date of commencement of pension is prior to 01.09.2014?

Ans.: Since the date of commencement of pension is prior to 01.09.2014, the pensionable salary shall be calculated based on the average monthly pay drawn during the contributory period of service in the span of 12 months preceding the date of exit from the membership of the pension fund.

How will member pensionable salary be calculated for members of EPS, 95 eligible for pension on higher wages, who retired prior to 01.09.2014 but where the date of commencement of pension is on or after 01.09.2014?

Ans. : Since date of commencement of pension is on or after 01.09.2014, the member pensionable salary shall be calculated based on the average monthly pay drawn during the contributory period of service in the span of 60 months preceding the date of exit from the membership of the pension fund.

How will member pensionable salary be calculated for members of EPS, 1995 who have retired after 01.09.2014?

The member pensionable salary calculation shall depend on the date of commencement of the pension.

For example:-

‘A’ retired from establishment ‘X’ at the age of 60 years on 01.01.2015. Even though his date of retirement is 01.01.2015, for EPS, 1995 he will be treated as superannuated at the age of 58 i.e. prior to 01.09.2014. Accordingly, his pensionable salary shall be calculated based on the average monthly pay drawn during the contributory period of service in the span of 12 months preceding the date of exit from the membership of the pension fund.

‘B’ retired from establishment ‘X’ at the age of 50 years on 01.01.2012. Even though he retired in 2012, he can opt to take a pension at the age of 58 i.e. after 01.09.2014. Accordingly, his pensionable salary shall be calculated based on the average monthly pay drawn during the contributory period of service in the span of 60 months preceding the date of exit from the membership of the pension fund.

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Harry Byrne

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