Family Pension - Provident Fund
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Family Pension - Provident Fund

vikas.mail80 Started The Discussion:

what is eligibility for the pension under FPF act 1995 and how the pension is calculated

abbasiti - Member Since: May 2010
Dear Vikas,

Minimum 10 yrs' service in EPF is required to get pension.
Regarding pension calculation, I shall give some details.

There is no upper limit for Eps-95 pension. For pension calculation, the service will be taken into 2 parts. Service before 16.11.95 and service w.e.f 16.11.95. The first one is called as past service and latter one as pensionable service. Past service is divided into 4 slabs. Service upto 11 years, 12 to 15 years, 16 to 19 years and 20 & above. If the salary on 16.11.95 is below Rs. 2500, the monthly compensation will be Rs. 80, 95, 120 & 150 respectively. For Rs. 2500 & above this will be Rs. 85, 105, 135 & 170. This amount is for those who attain 58 years on 16.11.95. In the case of those attain 58 years after 16.11.95, the above compensation will be multiplied by a factor stipulated in table B, according to the difference between 16.11.95 and the date of completion of 58 years.

For pensionable service there is a formula to calculate pension. It is Pensionable Salary x Pensionable Service / 70. Pensionable salary can be categorised in to 3. 1) Below Rs. 6500. 2) Rs. 6500 & above, but contribution on statutory celing of Rs. 6500. 3) Above Rs. 6500 & opted to contribute on actual salary. In case of 2nd, pensionable salary is Rs. 6500. In other two cases, pensionable salary will be the average of last twelve months. Also if pensionable service is 20 years & above 2 year's bonus will be given.

For details please see the web site :
EPFO

One example I shall quote.

Date of Birth - 2.1.1961
Date of join - 23.2.1987
Salary on 16.11.95 - Rs. 2500 & above
Salary on completion of 58 years on 1.1.2019 - Rs. 6500 (Statutory Ceiling)

Past Service - 8 yr 9 m (approx) rounded to 9 years
Compensation - Rs. 85
Factor as per Table B (for less than 24 years, i.e the difference between 16.11.95 & 1.1.2019) - 6.102
(This can be calculated as 1.08 to the power of 24 - 0.5, correct to 3 decimals)
Past Service Benefit - 85 x 6.102 = Rs. 519 - (A)

Pensionable Service - 23 years
Bonus (Service is 20 & above) - 2
Pensionable Salary - Rs. 6500
Pensionable Benefit - 6500 x 25 / 70 = 2321 - (B)

Total Pension - (A) + (B) = Rs. 2840

Besides the above method calculation there will be a minimum for those who have service before 16.11.95. In the EPS-95, they are categorised into three.
1. Date of commencement of Pension before 16.11.2000
2. Date of commencement of Pension between 16.11.2000 & 16.11.2005
3. Date of commencement of Pension after 16.11.2005

As the first two categories are already over, I shall a give a brief on third.

Pensionable benefit (minimum) of Rs. 635 and Past service benefit as mentioned above, subject to a minimum of Rs. 800. This amount is for 24 yrs or more service. If it is less than 24 yrs, this will be reduced in proportionate (amount x actual service / 24). However this amount will be subject to a minimun of Rs. 450.

I shall insert Excel work sheet to calculate pension. Enter Date of Birth, Date of Join, Date of Seperation from Service, Salary on 16.11.95, Salary on Seperation from Service ( in compliance with the contribution to pension fund) and break in service before and after 16.11.95, if any in green colour column. The results will appear in yellow colour column. The red colour is for static information.

In case of any error or suggestion, please notice to me.

Abbas.P.S,
ITI Ltd, PALAKKAD - 678 623
Ph. +91 9447 467 667


Attached FilesProvided by community member abbasiti. Join us to learn and grow with your peers.
File Type: xls EPF Pension.xls (26.0 KB, 498 views)
kasinaravikumar - Member Since: Apr 2007
Quote:
Originally Posted by abbasiti View Post
Dear Vikas,

Minimum 10 yrs' service in EPF is required to get pension.
Regarding pension calculation, I shall give some details.

There is no upper limit for Eps-95 pension. For pension calculation, the service will be taken into 2 parts. Service before 16.11.95 and service w.e.f 16.11.95. The first one is called as past service and latter one as pensionable service. Past service is divided into 4 slabs. Service upto 11 years, 12 to 15 years, 16 to 19 years and 20 & above. If the salary on 16.11.95 is below Rs. 2500, the monthly compensation will be Rs. 80, 95, 120 & 150 respectively. For Rs. 2500 & above this will be Rs. 85, 105, 135 & 170. This amount is for those who attain 58 years on 16.11.95. In the case of those attain 58 years after 16.11.95, the above compensation will be multiplied by a factor stipulated in table B, according to the difference between 16.11.95 and the date of completion of 58 years.

For pensionable service there is a formula to calculate pension. It is Pensionable Salary x Pensionable Service / 70. Pensionable salary can be categorised in to 3. 1) Below Rs. 6500. 2) Rs. 6500 & above, but contribution on statutory celing of Rs. 6500. 3) Above Rs. 6500 & opted to contribute on actual salary. In case of 2nd, pensionable salary is Rs. 6500. In other two cases, pensionable salary will be the average of last twelve months. Also if pensionable service is 20 years & above 2 year's bonus will be given.

For details please see the web site :
EPFO

One example I shall quote.

Date of Birth - 2.1.1961
Date of join - 23.2.1987
Salary on 16.11.95 - Rs. 2500 & above
Salary on completion of 58 years on 1.1.2019 - Rs. 6500 (Statutory Ceiling)

Past Service - 8 yr 9 m (approx) rounded to 9 years
Compensation - Rs. 85
Factor as per Table B (for less than 24 years, i.e the difference between 16.11.95 & 1.1.2019) - 6.102
(This can be calculated as 1.08 to the power of 24 - 0.5, correct to 3 decimals)
Past Service Benefit - 85 x 6.102 = Rs. 519 - (A)

Pensionable Service - 23 years
Bonus (Service is 20 & above) - 2
Pensionable Salary - Rs. 6500
Pensionable Benefit - 6500 x 25 / 70 = 2321 - (B)

Total Pension - (A) + (B) = Rs. 2840

Besides the above method calculation there will be a minimum for those who have service before 16.11.95. In the EPS-95, they are categorised into three.
1. Date of commencement of Pension before 16.11.2000
2. Date of commencement of Pension between 16.11.2000 & 16.11.2005
3. Date of commencement of Pension after 16.11.2005

As the first two categories are already over, I shall a give a brief on third.

Pensionable benefit (minimum) of Rs. 635 and Past service benefit as mentioned above, subject to a minimum of Rs. 800. This amount is for 24 yrs or more service. If it is less than 24 yrs, this will be reduced in proportionate (amount x actual service / 24). However this amount will be subject to a minimun of Rs. 450.

I shall insert Excel work sheet to calculate pension. Enter Date of Birth, Date of Join, Date of Seperation from Service, Salary on 16.11.95, Salary on Seperation from Service ( in compliance with the contribution to pension fund) and break in service before and after 16.11.95, if any in green colour column. The results will appear in yellow colour column. The red colour is for static information.

In case of any error or suggestion, please notice to me.

Abbas.P.S,
ITI Ltd, PALAKKAD - 678 623
Ph. +91 9447 467 667
__________________________________________________ _

Dear Sir,

My self K. Ravi Kumar (a cite HR member) from Hyderabad. Recently i appeared for one interview in a manufacturing company, there the HR asked me about Provident fund.

1) what is the wage limit for provident fund ?

2) if the salary is more than the limit than what is the necessity to take exemption?.

Please help me in this regard.

Thanking you,

K. Ravi Kumar
E-mail: ravi_cor@yahoo.co.in
M: 9966689223
Hyderabad.

abbasiti - Member Since: May 2010
Dear Ravikumar,

I shall answer your questions.
1. Ceiling limit of salary in EPF is Rs. 6500/-
2. Exemption is applicale in EPS-95 only. (For EPF contribution beyond ceiling, it is the discretion of employer). In statutory contribution pension will also based on the ceiling limit at the time of exit from EPS. In optional cases (i.e. in excess of ceiling limit) contribution will be on the actual salary which varies from time to time and the pension will be based on the average salary of last twelve months.

If any other questions, please ask

Abbas.P.S

bcarya - Member Since: Jun 2009
Dear vikas, You have provided very good and helpful information here. It will help lot to understand the Pension Applicability of a member.

bcarya - Member Since: Jun 2009
Dear Abbasiti, You have provided very good and helpful information here. It will help lot to understand the Pension Applicability of a member.

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