Employee Pension and EDLI Calculation Inquiry
One of the employees worked in the organization from 01.09.2013 to 05.12.2013. Regrettably, he died on 05.12.2013 due to a heart problem at home. He was a member of the EPF and pension scheme.
We paid him the following amounts during his service period:
- Basic salary: 5500
- DA: 8000
Age: 28
Marital status: Not married
Number of family members: 2 (Father and mother)
My question is, how do we calculate the pension in this case? And what about EDLI?
Regards,
Hekarthi
From India, Coimbatore
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46One of the employees worked in the organization from 01.09.2013 to 05.12.2013. Regrettably, he died on 05.12.2013 due to a heart problem at home. He was a member of the EPF and pension scheme.
We paid him the following amounts during his service period:
- Basic salary: 5500
- DA: 8000
Age: 28
Marital status: Not married
Number of family members: 2 (Father and mother)
My question is, how do we calculate the pension in this case? And what about EDLI?
Regards,
Hekarthi
From India, Coimbatore
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Dear Hekarthi, What is the meaning of "He is number In EPF and pension scheme?" plz. clear.
From India, Delhi
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From India, Delhi
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One of the employees worked in the organization from 01.09.2013 to 05.12.2013. Regrettably, he passed away on 05.12.2013 due to a heart problem at home. He was a member of the EPF and pension scheme during his service period. We paid him a basic salary of 5500 and a DA of 8000.
Age: 28
Marital Status: Not married
Family Members: 2 (Father and mother)
Pension Calculation and EDLI Query
My question is, how do we calculate the pension in this case? And what about EDLI?
Regards,
Hekarthi
From India, Coimbatore
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Age: 28
Marital Status: Not married
Family Members: 2 (Father and mother)
Pension Calculation and EDLI Query
My question is, how do we calculate the pension in this case? And what about EDLI?
Regards,
Hekarthi
From India, Coimbatore
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For the calculation of pension in this case:
16. Benefits to the Family on the Death of a Member:
(1) [Pension to the family] shall be admissible from the date following the date of death of the member if the member dies:
• (a) While in service, provided that at least one month's contribution has been paid into the Employees' Pension Fund.
(2) (a) The monthly widow pension shall be:
• (i) In the cases covered by clause (a) of sub-paragraph (1), equal to the monthly member's pension which would have been admissible as if the member had retired on the date of death or Rs 450/- or the amount indicated in Table 'C', whichever is more.
For more information on this, you can go through http://epfindia.com <link updated to site home>.
For benefit under EDLI:
Paragraph 22 of Employees Deposit Linked Insurance Scheme, 1974
22. Scales of Assurance Benefit and the Minimum Average Balance to be Maintained by an Employee:
(1) On the death of an employee, who is a member of the Fund or of a provident fund exempted under section 17 of the Act, as the case may be, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to the average balance in the account of the deceased in the Fund or of a Provident Fund exempted under Section 17 of the Act, as the case may be, during the preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds Rs.50,000 (erstwhile limit was Rs.25,000/-), the amount payable shall be Rs.50,000 (erstwhile Rs.25,000/-) plus 40% (earlier limit was 25%) of the amount in excess of Rs.50,000 (erstwhile Rs.25,000/-) subject to a ceiling of Rs. 1 lakh (earlier Rs. 35,000).
Hope this is helpful to you.
From India, Delhi
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16. Benefits to the Family on the Death of a Member:
(1) [Pension to the family] shall be admissible from the date following the date of death of the member if the member dies:
• (a) While in service, provided that at least one month's contribution has been paid into the Employees' Pension Fund.
(2) (a) The monthly widow pension shall be:
• (i) In the cases covered by clause (a) of sub-paragraph (1), equal to the monthly member's pension which would have been admissible as if the member had retired on the date of death or Rs 450/- or the amount indicated in Table 'C', whichever is more.
For more information on this, you can go through http://epfindia.com <link updated to site home>.
For benefit under EDLI:
Paragraph 22 of Employees Deposit Linked Insurance Scheme, 1974
22. Scales of Assurance Benefit and the Minimum Average Balance to be Maintained by an Employee:
(1) On the death of an employee, who is a member of the Fund or of a provident fund exempted under section 17 of the Act, as the case may be, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to the average balance in the account of the deceased in the Fund or of a Provident Fund exempted under Section 17 of the Act, as the case may be, during the preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds Rs.50,000 (erstwhile limit was Rs.25,000/-), the amount payable shall be Rs.50,000 (erstwhile Rs.25,000/-) plus 40% (earlier limit was 25%) of the amount in excess of Rs.50,000 (erstwhile Rs.25,000/-) subject to a ceiling of Rs. 1 lakh (earlier Rs. 35,000).
Hope this is helpful to you.
From India, Delhi
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As there is no eligible member within the family (spouse and children), the pension will not be applicable. However, EDLI is applicable, which in this case amounts to Rs. 1,30,000 (20 times the salary).
Regards,
Abbas.P.S
From India, Bangalore
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Regards,
Abbas.P.S
From India, Bangalore
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EDLI Calculation
EDLI is subject to the average PF balance of the member. Therefore, in the given case, it cannot be ₹1,30,000/- but should be the total of his PF balance divided by the number of months he worked.
Family Pension Details
Regarding family pension, please see Part B under Para 18 of the Scheme (see nomination form). In the second part, if there is no family, you have to see whom the member has nominated under Para 16(2)(a)(1) & (ii) of the EPS Scheme. That person will receive the pension for a lifetime.
From India, Mumbai
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EDLI is subject to the average PF balance of the member. Therefore, in the given case, it cannot be ₹1,30,000/- but should be the total of his PF balance divided by the number of months he worked.
Family Pension Details
Regarding family pension, please see Part B under Para 18 of the Scheme (see nomination form). In the second part, if there is no family, you have to see whom the member has nominated under Para 16(2)(a)(1) & (ii) of the EPS Scheme. That person will receive the pension for a lifetime.
From India, Mumbai
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The above-cited clause is amended with effect from 08.01.2011 vide GSR 9(E). Now, the above accumulation or 20 times of salary (subject to a salary ceiling of Rs. 6500), whichever is higher, will be as EDLI. The maximum possible accumulation in this case is Rs. 8532, and the average for one month is Rs. 2699 - (A).
20 times of 6500 is Rs. 1,30,000 - (B). Therefore, whichever is higher out of (A) & (B) is (B), i.e., Rs. 1,30,000, which will be paid towards EDLI. If there is no widow/widower and children, the nominee or parents are entitled to get a pension, provided the member has completed 10 years of service in EPF. Here, the service is only 3 months and 5 days. Hence, there is no question of nominee pension.
Regards,
Abbas.P.S
From India, Bangalore
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20 times of 6500 is Rs. 1,30,000 - (B). Therefore, whichever is higher out of (A) & (B) is (B), i.e., Rs. 1,30,000, which will be paid towards EDLI. If there is no widow/widower and children, the nominee or parents are entitled to get a pension, provided the member has completed 10 years of service in EPF. Here, the service is only 3 months and 5 days. Hence, there is no question of nominee pension.
Regards,
Abbas.P.S
From India, Bangalore
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Dear Abbas P S Sir,
First of all, thanks for updating the information in this regard. I have some doubts on this matter. Para 22 of the EDLI Act states:
22. Scales of Assurance Benefit and the Minimum Average Balance to be Maintained by an Employee
(1) On the death of an employee, who is a member of the Fund or of a provident fund exempted under Section 17 of the Act, as the case may be, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to the average balance in the account of the deceased in the Fund or of a Provident Fund exempted under Section 17 of the Act, as the case may be, during the preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds Rs. 50,000 (erstwhile limit was Rs. 25,000/-), the amount payable shall be Rs. 50,000 (erstwhile Rs. 25,000/-) plus 40% (earlier limit was 25%) of the amount in excess of Rs. 50,000 (erstwhile Rs. 25,000/-) subject to a ceiling of Rs. 1 lakh (earlier Rs. 35,000).
The Amendment Notification states:
G. S. R. 9 (E)
In exercise of the powers conferred by Section 6C read with sub-section (1) of Section 7 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the Central Government hereby makes the following Scheme, further to amend the Employees' Deposit Linked Insurance Scheme, 1976, namely:
1. (1) This Scheme may be called the Employees' Deposit Linked Insurance (Amendment) Scheme, 2011.
(2) It shall come into force from the date of its publication in the Official Gazette.
2. In the Employees' Deposit Linked Insurance Scheme, 1976, in paragraph 22, after sub-paragraph (2), the following sub-paragraph shall be substituted, namely:
“(22 A) On the death of an employee, who is a member of the Fund or of a provident fund exempted under Section 17 of the Act, as the case may be, who was in the employment of the same establishment for a continuous period of twelve months, preceding the month in which he died, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to:
(i) the average monthly wages drawn (subject to a maximum of rupees six thousand five hundred), during the twelve months preceding the month in which he died, multiplied by twenty times or;
(ii) the amount of benefit under sub-paragraph (1).
Here, in the amendment G. S. R. 9 (E), there is a condition mentioned (if I am getting it right), i.e., "who was in the employment of the same establishment for a continuous period of twelve months, preceding the month in which he died," which is not applicable in this case, as the service of the deceased member is only of 3 months 5 days. So, how will the accumulations be twenty times?
Please clarify. Thanks in advance.
Regards
From India, Delhi
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First of all, thanks for updating the information in this regard. I have some doubts on this matter. Para 22 of the EDLI Act states:
22. Scales of Assurance Benefit and the Minimum Average Balance to be Maintained by an Employee
(1) On the death of an employee, who is a member of the Fund or of a provident fund exempted under Section 17 of the Act, as the case may be, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to the average balance in the account of the deceased in the Fund or of a Provident Fund exempted under Section 17 of the Act, as the case may be, during the preceding twelve months or during the period of his membership, whichever is less, except where the average balance exceeds Rs. 50,000 (erstwhile limit was Rs. 25,000/-), the amount payable shall be Rs. 50,000 (erstwhile Rs. 25,000/-) plus 40% (earlier limit was 25%) of the amount in excess of Rs. 50,000 (erstwhile Rs. 25,000/-) subject to a ceiling of Rs. 1 lakh (earlier Rs. 35,000).
The Amendment Notification states:
G. S. R. 9 (E)
In exercise of the powers conferred by Section 6C read with sub-section (1) of Section 7 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the Central Government hereby makes the following Scheme, further to amend the Employees' Deposit Linked Insurance Scheme, 1976, namely:
1. (1) This Scheme may be called the Employees' Deposit Linked Insurance (Amendment) Scheme, 2011.
(2) It shall come into force from the date of its publication in the Official Gazette.
2. In the Employees' Deposit Linked Insurance Scheme, 1976, in paragraph 22, after sub-paragraph (2), the following sub-paragraph shall be substituted, namely:
“(22 A) On the death of an employee, who is a member of the Fund or of a provident fund exempted under Section 17 of the Act, as the case may be, who was in the employment of the same establishment for a continuous period of twelve months, preceding the month in which he died, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to:
(i) the average monthly wages drawn (subject to a maximum of rupees six thousand five hundred), during the twelve months preceding the month in which he died, multiplied by twenty times or;
(ii) the amount of benefit under sub-paragraph (1).
Here, in the amendment G. S. R. 9 (E), there is a condition mentioned (if I am getting it right), i.e., "who was in the employment of the same establishment for a continuous period of twelve months, preceding the month in which he died," which is not applicable in this case, as the service of the deceased member is only of 3 months 5 days. So, how will the accumulations be twenty times?
Please clarify. Thanks in advance.
Regards
From India, Delhi
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I very much appreciate that your postings are based on the Acts. However, simply reading the Acts may lead to misinterpretations. Hence, kindly get in touch with the concerned authorities; try to understand the practices and precedents they follow and describe accordingly. I shall reproduce your quotation below.
“(22 A) On the death of an employee, who is a member of the Fund or of a provident fund exempted under Section 17 of the Act, as the case may be, who was in the employment of the same establishment for a continuous period of twelve months preceding the month in which he died, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to:
(i) the average monthly wages drawn (subject to a maximum of rupees six thousand five hundred) during the twelve months preceding the month in which he died, multiplied by twenty times; or
(ii) the amount of benefit under sub-paragraph (1).
Here, the calculation criteria for an employee who is in employment for a continuous period of twelve months is given. However, nowhere is it stated that to get EDLI contribution, twelve months' continuous service is required.
Regards,
Abbas.P.S
From India, Bangalore
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“(22 A) On the death of an employee, who is a member of the Fund or of a provident fund exempted under Section 17 of the Act, as the case may be, who was in the employment of the same establishment for a continuous period of twelve months preceding the month in which he died, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations, be paid an amount equal to:
(i) the average monthly wages drawn (subject to a maximum of rupees six thousand five hundred) during the twelve months preceding the month in which he died, multiplied by twenty times; or
(ii) the amount of benefit under sub-paragraph (1).
Here, the calculation criteria for an employee who is in employment for a continuous period of twelve months is given. However, nowhere is it stated that to get EDLI contribution, twelve months' continuous service is required.
Regards,
Abbas.P.S
From India, Bangalore
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I always try to deeply understand the Acts and their provisions, as I am in the field of HR, so that I can help any employee in a better way. Here, I am still in doubt because, if you look at the Amendment Notification, EPFO has mentioned that "In the Employees' Deposit Linked Insurance Scheme, 1976, in paragraph 22, after sub-paragraph (2), the following sub-paragraph shall be substituted, namely" and then the new Para, i.e., (22A) starts.
Is that trying to say that if a member, employed in an establishment for a continuous period of twelve months preceding the month in which he died, then only the accumulations will be paid twenty times? Because in Para (22A)(ii) it said that accumulations be paid an amount equal to the amount of benefit under sub-paragraph (1). Here, does the sub-para (1) indicate the existing Para, i.e., 22(1)?
Please give your views.
Regards
From India, Delhi
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Is that trying to say that if a member, employed in an establishment for a continuous period of twelve months preceding the month in which he died, then only the accumulations will be paid twenty times? Because in Para (22A)(ii) it said that accumulations be paid an amount equal to the amount of benefit under sub-paragraph (1). Here, does the sub-para (1) indicate the existing Para, i.e., 22(1)?
Please give your views.
Regards
From India, Delhi
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Clarification on EDLI and Pension Provisions
I have already stated that, from the above-cited provision, it is understood that those with 12 months' continuous service in the same establishment will receive the EDLI compensation. What will happen if the service is continuous but in different establishments? Will the EPFO deny that member's EDLI? Regardless of the provisions in the Acts, EPFO personnel will work in compliance with the instructions they have. If it adversely affects us, we can seek justice. Note that if the service is below 12 months, nowhere is it mentioned that the EDLI benefit will be denied.
Family Pension and Withdrawal Benefit Deviations
In the case of family pension, withdrawal benefit, etc., deviations from the act are evident. Concerning family pension, the Act specifies that to receive this pension, there should be a minimum contribution of one month. However, if there is one-day attendance after EPF registration, family pension will be granted. Regarding withdrawal benefit, the Act stipulates paying the benefit according to the last drawn salary. Nevertheless, EPFO pays the benefit based on the average of the last twelve months.
Dear Aryaji, I have no role in the implementation part. I simply illustrate the provisions of the Act based on the precedents and practices I have experienced, inquiring with the concerned officials in EPF, the class and guidance provided by both the Education Officers in the Regional Office, Workers Education Department, Kozhikode, and EPFO personnel, etc.
If you still have doubts, I am unable to assist further. Please try to contact the concerned RPFO.
With regards,
Abbas.P.S
From India, Bangalore
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I have already stated that, from the above-cited provision, it is understood that those with 12 months' continuous service in the same establishment will receive the EDLI compensation. What will happen if the service is continuous but in different establishments? Will the EPFO deny that member's EDLI? Regardless of the provisions in the Acts, EPFO personnel will work in compliance with the instructions they have. If it adversely affects us, we can seek justice. Note that if the service is below 12 months, nowhere is it mentioned that the EDLI benefit will be denied.
Family Pension and Withdrawal Benefit Deviations
In the case of family pension, withdrawal benefit, etc., deviations from the act are evident. Concerning family pension, the Act specifies that to receive this pension, there should be a minimum contribution of one month. However, if there is one-day attendance after EPF registration, family pension will be granted. Regarding withdrawal benefit, the Act stipulates paying the benefit according to the last drawn salary. Nevertheless, EPFO pays the benefit based on the average of the last twelve months.
Dear Aryaji, I have no role in the implementation part. I simply illustrate the provisions of the Act based on the precedents and practices I have experienced, inquiring with the concerned officials in EPF, the class and guidance provided by both the Education Officers in the Regional Office, Workers Education Department, Kozhikode, and EPFO personnel, etc.
If you still have doubts, I am unable to assist further. Please try to contact the concerned RPFO.
With regards,
Abbas.P.S
From India, Bangalore
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