Employee Pension Scheme: Possible to exit after applying for higher EPS pension?

The Employees’ Provident Fund Organisation (EPFO) issued a circular on 11 May. The notice mandated that eligible employees and pensioners must provide written consent within a three-month timeframe in order to transfer funds from their Employees’ Provident Fund (EPF) account to the Employees’ Pension Scheme (EPS) account. The circular does not clarify the consequences of not providing written consent for transferring or depositing additional funds by the employee or pensioner. Moreover, if written consent is not given within the three-month timeframe, it raises an important question. The question is can it be inferred that the EPFO has indirectly offered an opportunity for employees or pensioners to exit the higher EPS pension option if they do not wish to continue with it? Once an employee has submitted an application for a higher EPS pension, it is crucial to understand that they are not allowed to terminate their participation or withdraw from the scheme. As told by experts to media outlets, obtaining written consent is crucial when redirecting or depositing funds for the purpose of applying for an increased EPS pension. However, it is important to note that this should not be interpreted as an opportunity to exit the scheme, as there is a lack of clarity from the EPFO regarding this matter. Vaibhav Bhardwaj, a Partner at IndusLaw, told The Economic Times that the 11 May circular primarily focuses on the actions that eligible pensioners, who have already chosen a higher pension amount under the EPS, need to take. Therefore, he stated that it seems unlikely that pensioners will be given a clear choice to exit during the three-month period mentioned. However, if pensioners do not provide consent or fail to deposit the required balance within the given deadlines, it may suggest that they are no longer interested in the option for a higher pension. He added that it will be interesting to see what actions the EPFO will take if pensioners decide to exit by declining to provide consent or deposit the required balance. The EPS is a component of EPF system in India, offering retirement benefits to individuals who have contributed to the EPF for a minimum of 10 years. Its purpose is to ensure financial stability for employees following their retirement, as well as in the case of their demise or disability. The management of the EPS falls under the jurisdiction of the EPFO. Read all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.