PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Amit Aishwary Choudhary
Managing People At Work.
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rajnish.031Dear Gupta Ji
As per EPF Pension scheme a person who has contributed for minimum 10 Years in EPF is eligible for pension after attaining age of 58 Yrs.
The formula for calculation of pension is Pensionable Salary X Pensionable Year /70.
From India, Bangalore
amit aishwary choudhary## 8.33% of employer’s monthly contribution from the EPF goes into EPS. Monthly contribution to EPS is restricted to 8.33% of 6500 or Rs 541 p.m and from Sep 2014 Rs 1250 (8.33% of 15,000). Government’s contribution is of 1.16% of the worker’s monthly wages if salary less than Rs 6,500.
## Unlike the EPF contribution EPS part (8.33% out of 12% contribution from your employer or Rs 541 and after Oct 2014 Rs 1250 what ever is minimum) does NOT get any interest.
## Lifelong pension is available to the member and upon his death members of the family are entitled for the pension.
## Pension is called Superannuation pension if one gets pension on retiring on attaining the age of 58 years
##A employee can start receiving the pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58/50 years.
## One can apply for EPS Pension from a date immediately following the date of completion of 58 years of age notwithstanding that the person has retired or ceased to be in the employment before that date.
## Maximum Pension one can get is Rs 7,500 per month.
## Minimum Pension one can get is Rs 1,000 per month.
## Maximum service for the calculation of service is 35 years.
## The fraction of service for six months or more is treated as one year and the service less than six months shall be ignored. So 9 years and 6 months will be rounded up to 10 years.
## If no wage is earned for a certain period, that period is to be deducted from the service, as there will be no contribution to Pension Fund.
## If one resigns before completing 9 years and 6 months of service, you get the “withdrawal benefit” which depends on your monthly salary and the no. of years of service.
## No pension is payable before the age of 50 years.
## Early pension can be claimed after 50 years but before the age of 58 years. But it is subject to discounting factor @ 4% (w.e.f. 26.09.2008) for every year falling short of 58 years. In case of death / disablement, the above restrictions doesn’t apply.
## No pensioner can receive more than one EPF Pension. So if you have worked in multiple organizations you meed to consolidate all your EPS and then apply for EPS Pension. If you have multiple Scheme Certificate you need to submit all of those.
## EPS Pension is taxable and has to be considered under the head Income from Salaries.
## How much EPS Pension will you get if you joined after 15.11.1995
- For those who joined after 15 Nov 1995 the formula for calculation of Pension is simple. the formula of calculation of pension is,
EPS Pension = Average Salary X Number of Years Service/70
$$ Make an Attention on the following Points:
1. Number of Years of Service in calculating EPS Pension
- You are eligible for pension after the 10 years of contributing to EPS. If your number of years are less than 10 you can withdraw your EPS amount.
- Maximum service for the calculation of service is 35 years.
- If you have completed more than 20 years in service then add two years bonus in above equation.
- The fraction of service for six months or more is treated as one year and the service less than six months is ignored. So 9 years and 6 months will be rounded upto 10 years, 15 years 9 months will be rounded to 16 years but 15 years 3 months will be rounded to 15 years.
- If you withdraw your EPS from earlier job,through Form 10C, then earlier years of service will not be counted.
Salary in calculating EPS Pension
2. The Average Salary here means pensionable salary in the scheme.
- Pensionable Salary here means amount you were contributing in EPS which is restricted to Rs 15,000 per year after 1 Sep 2014 and was Rs 6500 per year before 1 Sep 2014.
- It is arrived by considering the average contributing salary preceding 60 months from the date of exit. (Earlier it was preceding 12 months)
$$$ Lets look at examples of EPS Pension Calculation.
## How much pension will Mr.X get if he works for 14 years from 1 Jun 2015
Mr.X started his job on 1 Jun 2015. He works for 14 years. His average salary is 20,000 per month but for pension service maximum salary considered is Rs 15,000 or Rs 1250 per month. So Mr. Y pension from 2 Jun 2030 will be Rs (15,000 X 14)/70 = Rs 3000 per month.
## How much pension will Mr. X get if she works for 10 years from 1 Sep 2007 and retires on 1 Sep 2017
As Mr. X has contributed Rs 1250 per month from 1 Sep 2014, if he retires on 1 Sep 2017, her pensionable salary for last 60 months or 5 years will be Rs 11,600.
hence his pension would be (11600 X 10/70) = Rs 1657 per month
## How much pension will Mr. X get if he works for 20 years from 1 Sep 2010 and retires on 1 Sep 2030
As Mr. X has contributed Rs 1250 per month from 1 Sep 2014, if he retires on 1 Sep 2016 his pensionable salary for last 60 months or 5 years was Rs 15000 So his pensionable salary will be considered as (Rs. 15000*5 )/5= Rs 15000 per year. But as he has worked for 20 years she would get 2 years of bonus,
hence his pension would be (15,000 X 22/70) = Rs 4714 per month.
## What is the maximum amount of Pension available under EPS?
Based on a maximum employment period of 35 years, and maximum contribution of Rs 15000, the maximum amount of pension as per the Pension formula would be = 15000 * 35/70 = Rs 7,500 per month or Rs. 90,000(7500 * 12) per year.
On the above discussion and example you can understand each and everything of Employee Pension Scheme.
From India, Delhi
mukesh19832007Dear Sir, What is the procedure to claim pf pension amount after death of pensioner (wife of epf member, because epf member already died) ?? please advise the procedure in detail.
From India, New Delhi
Need your help to calculate month pension as per below details
Date of birth - 02.04.1960
Date of service joined- 01.04.1982,
Salary on 16.11.1995 -Rs. 2350/-PM
Salary up to 31.08.2014 -Rs.6500/- PM(statutory ceiling)
Salary from 01.09.2014 to 01.04.2018-Rs.15000/- PM(statutory ceiling)
Pension Entitlement from date 02.04.2018
Service from April 1982 to 16.11.95 (13 year ,7 month &16 days).
Service from 16.11.95 to 01.04.2018 (22 year, 4 month & 170days ).
From India, Surat
email@example.com, What is the procedure to get more monthly pension than the present calculation and contribution. Can I contribute more fund to my pension fund for getting better monthly pension. Biju
From India, Pune
shashiranjanraiAs per pension worksheet provided by EPFO, calculation of pensionable service in wage ceiling Rs 6500 and Rs 15000 has been considered in days instead of years as per details given here under:
Date of joining-01.10.1984 date of exit-10.01.2018 (on attainment of 58 years of age) date of birth being 10.01.1960.wage as on 16.11.1995-Rs 3500,
Past service (upto 16.11.1995)-11 years 01 month 15 days
Actual service (from 16.11.1995 to 10.01.12018)-22 years 01 month 25 days
pensionable service in wage ceiling Rs 6500 -6856 days
pensionable service in wage ceiling Rs 15000 - 1229 days
total pension worked out as Rs 3108
From India, Mumbai
Jagdish YadavRequest help to tell regarding early pension (EPFO) between the age of 50 to 56 formula and other details
From India, Delhi
Dheeraj7773today i am facing issue when i withdrawal the monthly pension 10d
From India, Delhi
anusree-ghoshFirstly, you have to find the pensionable salary. The pensionable salary is the average monthly salary from the past year, i.e. last 12 months. This amount is capped at INR 15,000. The employer's contribution towards EPF is 8.33% of this amount. Hence, it can be a maximum of INR 1250.
Next, you have to find the pensionable service. It is simply the total number of years that a particular employee has worked. Although, on completion of two decades, an employee is given a bonus of 2 years. Moreover, the duration pensionable of pensionable service is considered on a half-yearly basis.
To know more in detail about Provident Fund, check out https://asanify.com/blog/compliances..._source=citehr
From India, Kolkata