How Do EPFO's New Pension and Ceiling Changes Affect Your Retirement Plans?

EPFO Circulars on Minimum Pension and Ceiling

After years of waiting, EPFO has released the circulars on minimum pension as Rs. 1000 and ceiling as Rs. 15000. For those having a salary of Rs. 15000 and above, the following changes will be effected.

Pension Increases Based on Age and Contribution

- For those attaining 58 years on 30.9.2014, the pension will be increased by Rs. 39, for an additional contribution of Rs. 709 (1250-541).
- For those attaining 58 years on 30.11.2015, the pension will be increased by Rs. 668, for 15 months' contribution, i.e., an average of Rs. 44.50 for each month.
- For those attaining 58 years on 30.11.2016, the pension will be increased by Rs. 1257, for 27 months' contribution, i.e., an average of Rs. 46.50 for each month.
- For those attaining 58 years on 30.11.2017, the pension will be increased by Rs. 1894, for 39 months' contribution, i.e., an average of Rs. 48.50 for each month.
- For those attaining 58 years on 30.11.2018, the pension will be increased by Rs. 2581, for 51 months' contribution, i.e., an average of Rs. 50.60 for each month.

After 5 years of contribution w.e.f 01.09.2014 (i.e., after 31.08.2019), the pension for pensionable service (i.e., service after 16.11.1995) will be 30/13 (nearly 2.3) times.

Regarding EDLI Benefits

Now the benefit in EPF is Rs. 130000, which will be enhanced to Rs. 360000. For in lieu of EDLI (with insurance companies), Rs. 132000 for natural death will be increased to Rs. 362000, and Rs. 264000 for accidental death will become Rs. 724000.

I have gone through your posting and have some doubts about the calculations. For example, how did you arrive at the following:

"For those attaining 58 years on 30.11.2015, the pension will be increased by Rs. 668 for 15 months of contribution, i.e., an average of Rs. 44.50 for each month."

Regards,
Asok Kumar