Understanding My Scheme Certificate: How Does It Affect My Pension and New Job?

Dear Experts,

I resigned from my service after 11 years in 2011 and have received the Scheme Certificate. As I understand, I can use this Scheme Certificate after attaining the age of 50 years either for a one-time withdrawal benefit or for a monthly pension. Is my understanding correct?

If yes, I have the following two queries:

1. The Scheme Certificate mentions the following amounts:

- Pensionable Salary: 6403
- Last Salary: 6500

What is the difference between them, and which of these will be used to calculate the pension?

What will be the formula for calculating the monthly pension (I started service in 1998)?

2. I have now joined my new employer. They have their own PF trust and deduct 541/- for EPS from my monthly salary.

Should I submit the Scheme Certificate from my past service with my new employer?

Do the years that I work for my new employer only get added to my Pensionable Service (currently 11 years as per the Scheme Certificate) if I submit this Scheme Certificate with them now?

Or, can I get the benefit of aggregated Pensionable Service by accumulating individual Scheme Certificates (assuming I get another one from my current employer) at the time of redemption?

Warm Regards,

Krishna

As per my understanding, once you complete 10 years of contributions in EPF, you can receive a pension amount between the ages of 50 to 58. If you withdraw at the age of 58, you will receive the full benefit, which includes the full interest along with the pension amount.

Every month, you have been receiving Rs. 541 for pension, calculated as (6500*8.33).

To safeguard your scheme certificate, keep it secure or submit it to your current employer. Your new PF pension is separate, and there is no need to merge it with your previous pension account.

From the above details, it is clear that your last drawn salary is Rs. 6500, and the pensionable salary is Rs. 6403. The difference between these two is that the pensionable salary is the average of the last twelve months' salary, including the last drawn salary. If you completed 10 years or more of service in EPF, you are eligible for only a monthly pension. Accordingly, a one-time withdrawal benefit is not applicable.

For 11 years of service, the pension is calculated as 6403 x 11 / 70 = 1006 at 58 years of age. If you claim the pension between 50 and 58 years of age, you will lose 4% of the pension for each year.

You may either surrender the existing scheme certificate or combine both scheme certificates to get the accumulated total service. Note that in order to receive the pension before 58 years of age, you should be relieved from PF applicable service.

Regards,
Abbas.P.S

Thank you very much for the inputs. I need some more guidance.

1. It is hard for me to understand how they calculated ₹6403 as my Pensionable Salary. I have been contributing ₹541 monthly to EPS for so many years now. Would you recommend me to follow up on this?

2. What is the right time to surrender the scheme certificate? Should I surrender it now to my current employer or later on directly to the EPFO once I become eligible for a pension (after attaining an age of 50 or 58 years)?

3. Assuming I leave my current employer after a few years (but before completing 10 years with them) and opt for another scheme certificate. Will I be able to get the two scheme certificates merged by directly approaching the EPFO later on?

Warm Regards,
Krishna

If the contribution to the pension fund for the last twelve months is Rs. 541, i.e., 6500 x 8.33%, then your pensionable salary would be 6500, not 6403. Kindly contact the Regional PF Commissioner in this regard. The other two points can also be cleared with him.

Regards,
Abbas. P.S