Sir, I am working in a private company and will be retring within next 6 months and wish to know the pension scheme. Also please let me know the latest gratuity act scheme. regards Ravi
From India, Kanpur
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From India, Kanpur
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Dear Ravi,
A minimum of 10 years' service is required to qualify for a pension. Otherwise, you will receive a withdrawal benefit. The formula to calculate the withdrawal benefit is a factor as per Table B in compliance with service multiplied by the last drawn salary, subject to a ceiling of Rs. 6500.
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 referred to as past service, and the latter as 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 and 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 salaries of Rs. 2500 and above, the compensation will be Rs. 85, 105, 135, and 170. This amount is applicable to those who turn 58 years old on 16.11.95. For individuals who turn 58 years old after 16.11.95, the compensation will be multiplied by a factor specified in Table B, based on the difference between 16.11.95 and the date of completion of 58 years.
Regarding pensionable service, there is a formula to calculate the pension: Pensionable Salary multiplied by Pensionable Service divided by 70. Pensionable salary can be categorized into three groups: 1) Below Rs. 6500, 2) Rs. 6500 and above, with contributions capped at the statutory ceiling of Rs. 6500, and 3) Above Rs. 6500 and choosing to contribute based on actual salary. In the second case, the pensionable salary is Rs. 6500. In the other two scenarios, the pensionable salary will be the average of the last twelve months. Additionally, a two-year bonus will be granted for pensionable service of 20 years and above.
For further details, please visit the website: [EPFO](http://epfindia.com)
One example I can provide:
Date of Birth - 2.1.1961
Date of Joining - 23.2.1987
Salary on 16.11.95 - Rs. 2500 and above
Salary on completing 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 and 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 years and above) - 2
Pensionable Salary - Rs. 6500
Pensionable Benefit - 6500 x 25 / 70 = 2321 - (B)
Total Pension - (A) + (B) = Rs. 2840
Apart from the above method of calculation, there is a minimum for those with 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 and 16.11.2005
3. Date of commencement of Pension after 16.11.2005
As the first two categories have already passed, I will briefly explain the third category.
The minimum pensionable benefit is Rs. 635 and the 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 not be less than Rs. 450.
I will 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 any breaks in service before and after 16.11.95, if applicable, in the green-colored columns. The results will appear in the yellow-colored columns. The red color is for static information.
If there are any errors or suggestions, please notify me.
Abbas.P.S, ITI LTD, PALAKKAD - 678 623
From India, Bangalore
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530A minimum of 10 years' service is required to qualify for a pension. Otherwise, you will receive a withdrawal benefit. The formula to calculate the withdrawal benefit is a factor as per Table B in compliance with service multiplied by the last drawn salary, subject to a ceiling of Rs. 6500.
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 referred to as past service, and the latter as 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 and 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 salaries of Rs. 2500 and above, the compensation will be Rs. 85, 105, 135, and 170. This amount is applicable to those who turn 58 years old on 16.11.95. For individuals who turn 58 years old after 16.11.95, the compensation will be multiplied by a factor specified in Table B, based on the difference between 16.11.95 and the date of completion of 58 years.
Regarding pensionable service, there is a formula to calculate the pension: Pensionable Salary multiplied by Pensionable Service divided by 70. Pensionable salary can be categorized into three groups: 1) Below Rs. 6500, 2) Rs. 6500 and above, with contributions capped at the statutory ceiling of Rs. 6500, and 3) Above Rs. 6500 and choosing to contribute based on actual salary. In the second case, the pensionable salary is Rs. 6500. In the other two scenarios, the pensionable salary will be the average of the last twelve months. Additionally, a two-year bonus will be granted for pensionable service of 20 years and above.
For further details, please visit the website: [EPFO](http://epfindia.com)
One example I can provide:
Date of Birth - 2.1.1961
Date of Joining - 23.2.1987
Salary on 16.11.95 - Rs. 2500 and above
Salary on completing 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 and 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 years and above) - 2
Pensionable Salary - Rs. 6500
Pensionable Benefit - 6500 x 25 / 70 = 2321 - (B)
Total Pension - (A) + (B) = Rs. 2840
Apart from the above method of calculation, there is a minimum for those with 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 and 16.11.2005
3. Date of commencement of Pension after 16.11.2005
As the first two categories have already passed, I will briefly explain the third category.
The minimum pensionable benefit is Rs. 635 and the 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 not be less than Rs. 450.
I will 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 any breaks in service before and after 16.11.95, if applicable, in the green-colored columns. The results will appear in the yellow-colored columns. The red color is for static information.
If there are any errors or suggestions, please notify me.
Abbas.P.S, ITI LTD, PALAKKAD - 678 623
From India, Bangalore
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