Confused About PF Pension Calculation? Why Is 70 Used in the Formula?

Dear All,

I have a small doubt in PF Pension calculation formula. Please explain the doubt I have. The formula is Average salary X No. of years of service / 70.
"Why is 70 taken for dividing?"

Regards,
Rajesh S

70 is nothing but a mathematical figure only. The labor department ensures that the employee can work a maximum of 35 years, and the pension would be 50% of the last wages. So, the 35/70 formula is applied. There are many more intricacies within the scheme, but 70 is just a number to determine the percentile of the payable amount.