Dear friends,
An employee contributory service is 33 years, and the pensionable salary is Rs. 5000 per month. How much monthly pension is this employee to receive under the Employees' Pension Scheme? If you know, please provide the solution with detailed calculations.
Regards,
Nasir
From India, Mumbai
An employee contributory service is 33 years, and the pensionable salary is Rs. 5000 per month. How much monthly pension is this employee to receive under the Employees' Pension Scheme? If you know, please provide the solution with detailed calculations.
Regards,
Nasir
From India, Mumbai
Pension Calculation Requirements
To calculate pension, the following information is required:
- Date of Birth
- Date of Joining in EPF
- Date of Exit from EPF
- Break in Service before 16.11.95
- Break in Service after 16.11.95
- Salary on 16.11.95
- Salary at the time of exit from EPS-95
- Date of pension availing.
In the absence of the above data, I shall provide some guidance on pension calculation.
EPS-95 Pension Calculation
There is no upper limit for EPS-95 pension. For pension calculation, the service will be divided into two parts: service before 16.11.95 and service from 16.11.95 onwards. The former is termed as past service and the latter as pensionable service. Past service is categorized 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, & 150 respectively. For Rs. 2500 & above, the amounts will be Rs. 85, 105, 135, & 170. This amount is for those who turn 58 years on 16.11.95. For those who turn 58 years after 16.11.95, the compensation will be multiplied by a factor specified in table B, based on the gap between 16.11.95 and the 58th birthday.
For pensionable service, there is a formula to calculate pension: Pensionable Salary x Pensionable Service / 70. Pensionable salary can be categorized into three groups:
1) Below Rs. 6500.
2) Rs. 6500 & above, with contributions at the statutory ceiling of Rs. 6500.
3) Above Rs. 6500 & opted to contribute based on actual salary.
In the second case, the pensionable salary is Rs. 6500. In the other two cases, the pensionable salary will be the average of the last twelve months. Additionally, if the pensionable service is 20 years & above, a 2-year bonus will be granted.
For further details, please visit the website: http://epfindia.com (link updated to site home).
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 yr 9 m (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
Minimum Pensionable Benefit
In addition to the above method of calculation, there will be a minimum for those with service before 16.11.95. In the EPS-95, they are classified into three categories:
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 completed, I will provide a brief on the third.
The minimum pensionable benefit is Rs. 635 and past service benefit, as mentioned above, subject to a minimum of Rs. 800 for 24 years or more of service. If the service is less than 24 years, this amount will be proportionately reduced (amount x actual service / 24). However, this amount will be subject to a minimum of Rs. 450.
I will insert an Excel worksheet to calculate 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-colored column. The results will appear in the yellow-colored column. The red color is for static information.
If there are any errors or suggestions, please notify me.
Regards
From India, Bangalore
To calculate pension, the following information is required:
- Date of Birth
- Date of Joining in EPF
- Date of Exit from EPF
- Break in Service before 16.11.95
- Break in Service after 16.11.95
- Salary on 16.11.95
- Salary at the time of exit from EPS-95
- Date of pension availing.
In the absence of the above data, I shall provide some guidance on pension calculation.
EPS-95 Pension Calculation
There is no upper limit for EPS-95 pension. For pension calculation, the service will be divided into two parts: service before 16.11.95 and service from 16.11.95 onwards. The former is termed as past service and the latter as pensionable service. Past service is categorized 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, & 150 respectively. For Rs. 2500 & above, the amounts will be Rs. 85, 105, 135, & 170. This amount is for those who turn 58 years on 16.11.95. For those who turn 58 years after 16.11.95, the compensation will be multiplied by a factor specified in table B, based on the gap between 16.11.95 and the 58th birthday.
For pensionable service, there is a formula to calculate pension: Pensionable Salary x Pensionable Service / 70. Pensionable salary can be categorized into three groups:
1) Below Rs. 6500.
2) Rs. 6500 & above, with contributions at the statutory ceiling of Rs. 6500.
3) Above Rs. 6500 & opted to contribute based on actual salary.
In the second case, the pensionable salary is Rs. 6500. In the other two cases, the pensionable salary will be the average of the last twelve months. Additionally, if the pensionable service is 20 years & above, a 2-year bonus will be granted.
For further details, please visit the website: http://epfindia.com (link updated to site home).
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 yr 9 m (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
Minimum Pensionable Benefit
In addition to the above method of calculation, there will be a minimum for those with service before 16.11.95. In the EPS-95, they are classified into three categories:
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 completed, I will provide a brief on the third.
The minimum pensionable benefit is Rs. 635 and past service benefit, as mentioned above, subject to a minimum of Rs. 800 for 24 years or more of service. If the service is less than 24 years, this amount will be proportionately reduced (amount x actual service / 24). However, this amount will be subject to a minimum of Rs. 450.
I will insert an Excel worksheet to calculate 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-colored column. The results will appear in the yellow-colored column. The red color is for static information.
If there are any errors or suggestions, please notify me.
Regards
From India, Bangalore
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