A member of EPF automatically becomes a member of the Employees' Pension Scheme as well. Therefore, all EPF members are eligible for a pension provided they have completed at least 10 years of service and have reached the pensionable age of 58 years. Although receiving a reduced pension before turning 58 is possible, ten years of membership are mandatory.
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Madhu.T.K
From India, Kannur
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4584Regards,
Madhu.T.K
From India, Kannur
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Pension Calculation Overview
For pension calculation, the service will be 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 & 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 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 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. Additionally, if pensionable service is 20 years & above, a 2-year bonus will be given.
For details, please see the website: http://epfindia.com
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 Pension Calculation
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 past service benefit as mentioned above, subject to a minimum of Rs. 800. This amount is for 24 years or more 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 break 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 error or suggestion, please notify me.
Regards, Abbas.P.S, ITI LTD, PALAKKAD - 678 623. [Phone Number Removed For Privacy Reasons]
From India, Bangalore
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For pension calculation, the service will be 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 & 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 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 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. Additionally, if pensionable service is 20 years & above, a 2-year bonus will be given.
For details, please see the website: http://epfindia.com
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 Pension Calculation
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 past service benefit as mentioned above, subject to a minimum of Rs. 800. This amount is for 24 years or more 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 break 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 error or suggestion, please notify me.
Regards, Abbas.P.S, ITI LTD, PALAKKAD - 678 623. [Phone Number Removed For Privacy Reasons]
From India, Bangalore
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EPF PENSION CALCULATION.zip
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