I came to know how EPS is calculated from the very lucid explanation given in the below link (same site). However, my question is: if the employee quits the company after, say, 5 years and joins another company, is the EPS share of the previous employer for the 5 years forgone? I read in an ET article that only the PF contribution from the employer is carried forward and the EPS share from the employer is deducted from the PF money for the employee if the employee quits the company. Is this true? Kindly explain/clarify with an example.
Thanks.
From India, Bangalore
Acknowledge(0)
Amend(0)
Thanks.
From India, Bangalore
Acknowledge(0)Amend(0)
Both the Pf amount and EPS service can be carried forward / transferred to club with future service. Single form (Form 13) will do for both. Abbas.P.S
From India, Bangalore
Acknowledge(0)Amend(0)
530From India, Bangalore
Acknowledge(0)Amend(0)
As clarified by Mr. Abbas P. S., one receives the benefits of both the PF accumulations with interest as well as the pension contribution in the form of length of service if the old PF/pension is transferred to the new employer. One receives a pension based on the length of membership of the EPF/pension account and not on the contributions made to it. Pension is determined based on the last twelve months' wages before the termination of one's services.
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
No, but recent decisions by the trustees of the EPF board state that if any member does not have continuous contributions in their account, they cannot earn interest on the deposits lying in the subscriber's account. Hence, it is necessary that the account should not be dormant continuously for 36 months.
From India, New Delhi
Acknowledge(0)Amend(0)
From India, New Delhi
Acknowledge(0)Amend(0)
Pension Calculation Overview
For pension calculation, the service is divided into two parts: service before 16.11.95 and service from 16.11.95 onwards. 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 years & above. If the salary on 16.11.95 is below Rs. 2500, the monthly compensation will be Rs. 80, 95, 120, and 150, respectively. For Rs. 2500 & above, this will be Rs. 85, 105, 135, and 170. This amount is for those who attain 58 years on 16.11.95. For 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.
Pensionable Service Calculation
For pensionable service, there is a formula to calculate the pension: Pensionable Salary x Pensionable Service / 70. Pensionable salary can be categorized into three groups:
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 case of the second category, 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
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
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 groups:
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.
The pensionable benefit (minimum) is Rs. 635, and the past service benefit, as mentioned above, is subject to a minimum of Rs. 800. This amount is for 24 years or more of 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.
I shall insert an Excel worksheet to calculate the 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 breaks 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 errors or suggestions, please notify me.
Regards,
Abbas. P. S, ITI Ltd, PALAKKAD - 678 623
Ph. [Phone Number Removed For Privacy Reasons]
From India, Bangalore
Acknowledge(0)Amend(0)
For pension calculation, the service is divided into two parts: service before 16.11.95 and service from 16.11.95 onwards. 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 years & above. If the salary on 16.11.95 is below Rs. 2500, the monthly compensation will be Rs. 80, 95, 120, and 150, respectively. For Rs. 2500 & above, this will be Rs. 85, 105, 135, and 170. This amount is for those who attain 58 years on 16.11.95. For 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.
Pensionable Service Calculation
For pensionable service, there is a formula to calculate the pension: Pensionable Salary x Pensionable Service / 70. Pensionable salary can be categorized into three groups:
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 case of the second category, 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
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
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 groups:
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.
The pensionable benefit (minimum) is Rs. 635, and the past service benefit, as mentioned above, is subject to a minimum of Rs. 800. This amount is for 24 years or more of 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.
I shall insert an Excel worksheet to calculate the 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 breaks 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 errors or suggestions, please notify me.
Regards,
Abbas. P. S, ITI Ltd, PALAKKAD - 678 623
Ph. [Phone Number Removed For Privacy Reasons]
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
PF & Pension Amdmt Scheme 2010 for IW.pdf
Employee Pension Scheme, 1995.doc