The Employees’ Provident Fund Organisation has released a method to calculate your higher pension on your actual salary. The calculations will be applicable to those who have opted to get high pension benefits on their actual salary instead of getting it on ₹15,000 statutory limits, under the Employees Pension Scheme (EPS), 1995. The higher pension benefits are only offered after a thorough verification from the field officer. The officer checks all the details submitted by both employee and the employer.
Higher Pension Calculation
The higher pension will be calculated on the basis of average monthly pay which would be drawn 12 months before the date of retirement or exit from the pension fund.
“In the case of those who retired or will retire post this date, the pension will be calculated on the basis of average monthly pay during the 60 months immediately preceding the retirement. At present, it is calculated as pension = pensionable salary (average of last 60 months’ salary) x number of years of contribution / 70,” mentioned by moneycontrol.
Last Date to File Joint Applications
The Supreme Court while directing the EPFO to enable higher pension in November 2022, had let it sustain its rights to do formula revision to compute pension.
“For employees, the deadline for choosing the higher pension option under the Employees’ Pension Scheme (EPS) 1995 is June 26, which was extended from May 3 earlier. It will then have to be validated by the employer, followed by EPFO’s field officers taking it up for assessment. They will verify the uploaded data and documentation and, they will have to do so within 20 days of having received the application,” mentioned by money control.
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Checking Eligibility
Those employees who were members of EPFO and Employees’ Pension Scheme (EPS) before September 1, 2014, and are still in service but have not yet opted for higher pension services can now apply. And for those employees who have retired before this date and are eligible to opt for higher pension options.
“If you decide to opt for a pension on your actual, and not the statutory salary of Rs 15,000, you will have to make the decision to file an application through the online facility on the EPFO’s member portal.”
“At present, pension is calculated on the statutory wage ceiling of Rs 15,000. Out of your employer’s contribution, Rs 1,250 (8.33 per cent of Rs 15,000) goes towards EPS. This amount joins the pool created under EPS to pay regular pension income to member-employees with at least ten years’ service and their dependent family members.”
“You can, however, now choose to direct 8.33 per cent of your actual salary towards the pension pool, translating potentially into a higher pension post-retirement, thanks to the Supreme Court verdict.”
Calculations were mentioned by Money Control.
