Dear Seniors,
As we all know that pension is calculated as PENSIONABLE AGE MULTIPLIED BY PENSIONABLE SALARY DIVIDED BY 70. How do we calculate Pensionable Age and why do we divide it by 70. Can anyone please throw some light on this subject matter?
Thank you for your help.
J P Das
From India, Delhi
1As we all know that pension is calculated as PENSIONABLE AGE MULTIPLIED BY PENSIONABLE SALARY DIVIDED BY 70. How do we calculate Pensionable Age and why do we divide it by 70. Can anyone please throw some light on this subject matter?
Thank you for your help.
J P Das
From India, Delhi
Dear JP Das,
1. It is not the pensionable age, but pensionable service.
It is the service from a) 16.11.1995 or Date of Join in EPS whichever is later to b) the date of leaving from EPS, i.e date of attaing tthe age 58 years or date of leaving EPF whichever is earlier.
2. At the time of introduction of EPS-95, as per the Central government Service Pension Scheme; pension eligible for a service of 33 years or more is 50%. In EPS-95, for 33 years' pensionable service a bonus of 2 years will be granted. (This is applicable for a pensionable service of 20 years or more). i.e 33 years' service will be treated as 35 years for pension calculation. Accordingly to get 50%, 35 has to be divided by 70 and the above formula is derived.
Abbas.P.S
From India, Bangalore
1. It is not the pensionable age, but pensionable service.
It is the service from a) 16.11.1995 or Date of Join in EPS whichever is later to b) the date of leaving from EPS, i.e date of attaing tthe age 58 years or date of leaving EPF whichever is earlier.
2. At the time of introduction of EPS-95, as per the Central government Service Pension Scheme; pension eligible for a service of 33 years or more is 50%. In EPS-95, for 33 years' pensionable service a bonus of 2 years will be granted. (This is applicable for a pensionable service of 20 years or more). i.e 33 years' service will be treated as 35 years for pension calculation. Accordingly to get 50%, 35 has to be divided by 70 and the above formula is derived.
Abbas.P.S
From India, Bangalore
Dear Mr. Abbas,
I am again thankful to you. Let me put in my word as per my understanding. Let say A has joined 01.01.1991 and B has joined on 01.01.2001 and both have joined at the age of 25 years. A retires at the age of 58 on 01.01.2024 and B retires on 01.01.2034. As per EPS-95, A's pensionable service would be approximately 28 years and B's pensionable service would be approximately 33 years. Please let me know if my understanding is correct.
Secondly, why its 50% pension as you mentioned in the second point. 2 years bonus will not be granted to a person who retires in Y2010 (as per EPS-95, his pensionable service will be 15 years at the time or retirment)?
Please help with you valuable comments.
Thanks much.
From India, Delhi
I am again thankful to you. Let me put in my word as per my understanding. Let say A has joined 01.01.1991 and B has joined on 01.01.2001 and both have joined at the age of 25 years. A retires at the age of 58 on 01.01.2024 and B retires on 01.01.2034. As per EPS-95, A's pensionable service would be approximately 28 years and B's pensionable service would be approximately 33 years. Please let me know if my understanding is correct.
Secondly, why its 50% pension as you mentioned in the second point. 2 years bonus will not be granted to a person who retires in Y2010 (as per EPS-95, his pensionable service will be 15 years at the time or retirment)?
Please help with you valuable comments.
Thanks much.
From India, Delhi
Dear JP Das,
1. Your understanding on the first paragraph is correct.
2. 50% is for 33 years' service. The context is already explained. At the time of EPS introduction, there wasn't any eligibility for service pension for 15 years' service. Hence there is no room for a discrepancy.
Abbas.P.S
From India, Bangalore
1. Your understanding on the first paragraph is correct.
2. 50% is for 33 years' service. The context is already explained. At the time of EPS introduction, there wasn't any eligibility for service pension for 15 years' service. Hence there is no room for a discrepancy.
Abbas.P.S
From India, Bangalore
Dear all,
Gud noon,I have a small doubt in Pf Pension calculation formula.Pl elaborate the doubt i have
that is Formula is Average salary X No.of year service / 70.Why 70 is taken for dividing.
Regards
Prakash k
From India, Chennai
Gud noon,I have a small doubt in Pf Pension calculation formula.Pl elaborate the doubt i have
that is Formula is Average salary X No.of year service / 70.Why 70 is taken for dividing.
Regards
Prakash k
From India, Chennai
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Computation of Pension-Part B.pdf
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