Dear Subject Matter experts on EPS,
There is an interpretation of the Supreme Court judgment dated 04.11.22 that pensionable salary for calculating the Pension will be the average of the last 60 months' salary.
Presently, if you see the PPO, this is not true and nobody is getting the Pension based on Rs. 15,000/- for the entire service, i.e., service between 95 to September, 14. It means the EPFO is taking the average salary/wages of the entire service while determining the pensionable Service.
I joined the EPS Scheme on 01.09.1997 and have deferred my Pension up to 60 years. Please confirm the basis of the calculation of my Pensionable salary. If I calculate my pension on the basis of the average of the last 60 months of salary, I will be getting around 40% more pension compared to the calculation based on the salary/PF wages of the entire service. In other words, if I take an average of 60 months, the option of a higher pension is very lucrative to me, and if I take an average from the date of joining the EPS Scheme, it is not beneficial to opt for a higher pension. Request you to kindly suggest as even the top consultants charging a very hefty fee and organizing the conferences on this are not very clear.
Kindly also suggest which para of the SC judgment dated 04.11.22 is confirming the change of calculation of pensionable service contrary to the existing practice except for the period of 12 months to 60 months. I mean, in which paragraph is it written or can be interpreted that the pensionable service even before the period before 01.09.14 will be on the basis of the last 60 months' average salary.
Regards,
Dr. Kamlesh Agrawal, Mumbai
From India, Delhi
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18There is an interpretation of the Supreme Court judgment dated 04.11.22 that pensionable salary for calculating the Pension will be the average of the last 60 months' salary.
Presently, if you see the PPO, this is not true and nobody is getting the Pension based on Rs. 15,000/- for the entire service, i.e., service between 95 to September, 14. It means the EPFO is taking the average salary/wages of the entire service while determining the pensionable Service.
I joined the EPS Scheme on 01.09.1997 and have deferred my Pension up to 60 years. Please confirm the basis of the calculation of my Pensionable salary. If I calculate my pension on the basis of the average of the last 60 months of salary, I will be getting around 40% more pension compared to the calculation based on the salary/PF wages of the entire service. In other words, if I take an average of 60 months, the option of a higher pension is very lucrative to me, and if I take an average from the date of joining the EPS Scheme, it is not beneficial to opt for a higher pension. Request you to kindly suggest as even the top consultants charging a very hefty fee and organizing the conferences on this are not very clear.
Kindly also suggest which para of the SC judgment dated 04.11.22 is confirming the change of calculation of pensionable service contrary to the existing practice except for the period of 12 months to 60 months. I mean, in which paragraph is it written or can be interpreted that the pensionable service even before the period before 01.09.14 will be on the basis of the last 60 months' average salary.
Regards,
Dr. Kamlesh Agrawal, Mumbai
From India, Delhi
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Pensionable salary is the pension-contributing salary for 60 months immediately preceding your date of attaining 58 years of age. It is not preceding the age at which you have reached 60. By opting for deferred pension, you may receive additional benefits of certain amounts, such as 2% or 4%, depending on your contributions to the pension fund since the date of actual retirement at 58 years of age. If your actual retirement date is in 2021, the average would be based on Rs 15,000. However, if you retired in 2018, when calculating the 60-month average, a period of service with Rs 6,500 as the pension-contributing salary would also be considered, potentially resulting in a lower pension amount. Please verify this information.
The Apex Court has not deemed the 2014 amendment to the pension scheme as whimsical. The Court acknowledged that the EPF Act grants the Central Government the authority to modify the pension scheme either prospectively or retrospectively. Nonetheless, it pointed out that the additional contribution of 1.16% by employees on contributions exceeding Rs 15,000 is unlawful and has been invalidated. Furthermore, the amendment concerning the calculation of the pensionable salary has been upheld by the Court. Some employees are currently receiving pensions based on a 12-month salary, as directed by the Kerala High Court. They have been instructed to reimburse the amounts received by recalculating the pension based on a 60-month period.
From India, Kannur
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The Apex Court has not deemed the 2014 amendment to the pension scheme as whimsical. The Court acknowledged that the EPF Act grants the Central Government the authority to modify the pension scheme either prospectively or retrospectively. Nonetheless, it pointed out that the additional contribution of 1.16% by employees on contributions exceeding Rs 15,000 is unlawful and has been invalidated. Furthermore, the amendment concerning the calculation of the pensionable salary has been upheld by the Court. Some employees are currently receiving pensions based on a 12-month salary, as directed by the Kerala High Court. They have been instructed to reimburse the amounts received by recalculating the pension based on a 60-month period.
From India, Kannur
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I joined EPS on 22.09.1997 and retired on 17.08.2014 upon reaching the age of 58 years. My pension is not calculated based on the average salary for the last 12 months or 60 months. The pension is calculated separately on the basis of the salary sealing process. Initially, it was calculated on a salary of 5000 until the sealing was increased to 6500, and after that, it is calculated on 6500. I would like to inquire if this is the correct method?
Thank you.
From India, Pathankot
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Thank you.
From India, Pathankot
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The method of calculation of pension for individuals like you who retired prior to 1st September 2014 should be based on the average salary of Rs 6,500 for the preceding 12 months, not 60 months. The provision for calculating the average pension qualifying salary, subject to a maximum of Rs 15,000 for the preceding 60 months before the retirement date, was introduced in the 2014 amendment that took effect on 1st September 2014. Assuming there was no loss of pay or non-contributing salary, you should be entitled to a pension of approximately Rs 1,578.
From India, Kannur
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From India, Kannur
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Dear Experts Please let me know about factor of 70 which divided to pensionable salary as below. What is 70 and what is the basis of it. 15000/70 X No. of year of service Regards Rakesh Dubey
From India, Raipur
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From India, Raipur
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70 is a constant common factor used to calculate pension as per the Pension Scheme 1995. It may be (I don't know if it is scientifically true) on the assumption that a pensioner may live till the age of 70. If the life expectancy is increased to 80 years, naturally, he should get a lesser pension from his date of retirement, right?
From India, Kannur
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From India, Kannur
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