Significant Progress in Higher Pension Applications Under EPS, Demand Letters Issued

The Employees’ Provident Fund Organisation (EPFO) has issued a total of 32,591 demand letters, reflecting a cumulative demand of Rs1,974 crore as of October 12. This development comes from applicants who have chosen a higher pension under the Employees’ Pension Scheme (EPS). The progress of these applications, totaling around 17.49 lakh, was a key topic of discussion in the recent meeting of the Central Board of Trustees (CBT) held on October 31.
Breaking down the demand letters, 19,957 are for subscribers from exempted establishments, while 12,634 are from un-exempted establishments, according to data shared during the CBT meeting. Employers have submitted approximately 11.51 lakh forms to the field offices of the EPFO, with 5.97 lakh forms pending.
An official mentioned, “Demand letters for a total demand of Rs 1,974 crore have been raised from the applicants for deposit/diversion. Upon deposit/diversion, the applicants shall become eligible for pension on higher wages.” Notably, around 52% of the workload related to pension linked to higher wages is associated with exempted establishments.
For applicants seeking a higher pension under EPS, if the due amount is available in their provident fund accounts with the EPFO, only diversion is required. In cases where the due amount is not available with the EPFO, the member must deposit it directly or through the employer. It's crucial to note that the option for a higher pension becomes valid only after the amounts due to the pension fund are received for that specific individual.
Regarding the actuarial analysis, the EPFO plans to complete it once all applications for the validation of the joint option are disposed of. Currently, data from 13,059 cases, where demand letters were issued by field offices in mid-August, has been shared with the consultant actuary. The ongoing actuarial evaluation will continue for every 50,000 demand letters issued, followed by a final consolidated evaluation after all cases are finalized.
This progress marks a significant step forward in facilitating higher pensions for eligible individuals under EPS, showcasing the organization's commitment to addressing pension-related demands effectively.



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu