Dear Madhu,
Understanding EPS-95 Pension Calculation
There is no upper limit for EPS-95 pension. For pension calculation, the service is divided into two parts: service before 16.11.95 and service w.e.f 16.11.95. The first is called past service, and the latter is pensionable service. Past service is divided into four slabs: service up to 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 who 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: Pensionable Salary x Pensionable Service / 70. Pensionable salary can be categorized into three:
1. Below Rs. 6500.
2. Rs. 6500 & above, but contribution on the statutory ceiling of Rs. 6500.
3. Above Rs. 6500 & opted to contribute on actual salary.
In the second case, the pensionable salary is Rs. 6500. In the other two cases, the pensionable salary will be the average of the last twelve months. Also, if pensionable service is 20 years & above, a 2-year bonus will be given.
For details, please see the website:
EPFO <link updated to site home>.
Example Calculation
- Date of Birth: 2.1.1961
- Date of Joining: 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 years 9 months (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
Minimum Pension for Service Before 16.11.95
Besides the above method of calculation, there will be a minimum for those who have service before 16.11.95. In the EPS-95, they are categorized 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 give a brief on the 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 years or more service. If it is less than 24 years, this will be reduced proportionately (amount x actual service / 24). However, this amount will be subject to a minimum of Rs. 450.
Provisions for Death While in Service
Regarding death while in service or death before the age of 58 years and before claiming member pension, there is a widow pension amount stipulated in Table C. Either this amount or the amount as per the above calculation, whichever is higher, will be eligible in such cases.
I shall insert an Excel worksheet to calculate pension. Enter Date of Birth, Date of Joining, Date of Separation from Service, Salary on 16.11.95, Salary on Separation from Service (in compliance with the contribution to the pension fund), and break in service before and after 16.11.95, if any, in the green color column. The results will appear in the yellow color column. The red color is for static information.
In case of any error or suggestion, please notify me.
Regards,
Abbas.P.S, ITI Ltd, PALAKKAD - 678 623.
Ph. [Phone Number Removed For Privacy Reasons]