Confused About EDLI and Pension Calculations? Need Clarification on Recent Changes

Dear Mr. Praveen,

Thank you for your reply. I still have a confusion regarding the EDLI calculation. Is it still 20 times and 20%, or has it been revised to 30 times with a 1.5 lac Bonus subject to a maximum of Rs. 6 lac? Kindly confirm.

The calculation of Pension is also unclear to me. If Pensionable service is the last 12 months drawn salary, then what does "Pensionable salary" stand for?

Thanks and regards

Dear Asru.J,

The ceiling of EDLI is still Rs. 3,60,000. The pensionable salary is the average of 60 months. Please note that there is a cap of Rs. 6500 on the pensionable salary up to 31.08.2015.

Abbas.P.S

Dear Abbasiti, Thank you for your reply. I would like to seek an expert opinion from you on the following case:

Case Details

Suppose a person joined PF in 2008-09 and passed away in October 2015. His monthly salary for the last 12 months was Rs. 7,250.00. In the last month of his service, i.e., October 2015, the management paid his salary in cash without maintaining any record of the payment. Consequently, there was no record of PF deduction, and thus, PF was not deposited. I am seeking your input on this specific issue regarding EDLI calculation, particularly the impact of the missing month, October 2015.

EDLI Calculation

My understanding is that EDLI will be calculated as follows: 7,250 * 11/12 * 20 * 20% = Rs. 159,500.00, instead of Rs. 174,000.00. Kindly confirm this calculation.

Family Pension Eligibility

Additionally, could you please clarify if there will be any pension for the family since the deceased employee could not complete 10 years of service? If the family is eligible for any family pension, what would be the basis (formula) of calculation, and once again, how would the missing month affect the calculation?

I look forward to hearing from you and am grateful for your assistance.

Thanks and regards.

Dear Asru.J,

Management is liable to pay PF till the day of death. Kindly contact the Sub Regional PF Commissioner's Office. Even if the member has LWOP, the EDLI amount will be in full, which in this case is Rs. 1,74,000. In the case of death, 10 years completion is not required for a pension. The widow will receive Rs. 2051/-, and two of the children (elders) will each receive Rs. 513/- until they attain the age of 25 years.

Abbas.P.S

Dear Abbas P S,

My heartfelt gratitude for the prompt reply you have provided. Could you please elaborate on the basis of the calculation of the pension, which is Rs. 2051, and the children's benefit of Rs. 513? Kindly confirm if the amounts you mentioned are monthly or annually.

Thanks & regards

Dear Asru.J,

The pension mentioned above is to be paid monthly. For widow/widower pension, there is a chart, namely Table C. According to this table, for a salary of 6500 and above, the pension is 2051/-. (Please note that if the member's pension, as per the formula, is above this amount, the higher amount will be taken into account.) The child pension is 25% of the widow's pension.

Abbas.P.S

Dear Sir,

That's great, Mr. Abbas, and my gratitude for the same. I got the Table C chart, and now things are clear to me. Thank you once again. Could you please highlight if there has been any revision of late in the pension chart due to a change in the PF ceiling? The EDLI benefit is supposed to be increased to 30% + 1.50 lac with a maximum of 6.00 lac. Do you have any idea when it shall be implemented? Hope I am not troubling you by raising too many queries.

Thanks & regards

Dear Asru.J,

No, Table C has not been revised. Even though the ceiling salary has been enhanced to Rs. 15,000, the reflection in pension will be very minimal as the EPFO applies the new pensionable salary (average of the last 60 months) only to the service effective from 01.09.2015. For the period up to 31.08.2015, the salary is restricted to Rs. 6,500. This is a clear case of deception. If somebody were to approach the court, EPFO would definitely be in trouble as this practice is illogical and violates precedence. It was the demand of the Central Trade Unions to increase the ceiling limit so that the members could receive a corresponding increase in pension. However, EPFO seems to be the sole beneficiary as they receive higher contributions but provide very minimal benefits to pensioners. I believe EPFO is figuring out ways to reduce the pension amount for its members.

Regarding EDLI, the maximum limit is still Rs. 3,60,000.

Regards,
Abbas.P.S