Links to similar Pages of Our Head office:
1.Pension Scheme - General view    2.Pension Scheme. Detailed write-up
You may visit our head office pages referred above for authenticate information.
Funding | When to apply for pension | How Pension calculated|Commutation | Capital Return | Types of Pensions | If No Wages for some period | More than one Pension | Death Case | Not Opted yet | I want money back, not pension. |Pension is less, why? |More Pension | Scheme certificate | Calculate your Pension

    Pension Schemes of EPFO:

  1. Family Pension Scheme 1971 (FPS-71).
  2. Employees Pension Scheme 1995 (EPS-95).
So we may think only about EPS-95 here onwards

Employees' Pension Scheme 1995 (EPS-95)

Funding | When to apply for pension | How Pension calculated|Commutation | Capital Return | Types of Pensions | If No Wages for some period | More than one Pension | Death Case | Not Opted yet | I want money back, not pension. |Pension is less, why? | More Pension |Scheme certificate | Calculate your Pension

Funding of the Pension Scheme

An amount equal to 8.33% of Wages is pooled into the EPS from the Employer's contribution. ie., If a PF member gets Rs. 1000/- as monthly wages and he and his employer contributes 10% each, Rs. 100 + Rs.17 (=117) goes to Provident Fund and Rs. 83 goes to Pension Fund.
Govt. also contribute to this Welfare Scheme at the rate of 1.16% of wages

Valuating the Inflow and outflow to the EPS annually, each year Pension Relief is declared. During 2002-2003, 4% of Pension Relief was declared. (an increase of 4% in Pension amount).

Four situations When Pension can be applied for :
1. On superannuation
  • Age 58 years or More and
  • atleast ten years of service
The member can continue in service while receiving this pension
On attaining 58 Years of age, a EPF member cease to be a member of EPS automatically
2. Before superannuation
  • Age between 50 and 58 years and
  • atleast ten years of service
The member should not be in service
3. Death of the memberDeath while in service or
Death while not in service
4. Permanent disabilityPermanently and totally unfit for the employment which the member was doing at the time of such disablement

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Calculation of Pension:      Some more tips
Those who joined AFTER 15.11.1995Those who joined BEFORE 15.11.1995
Here, the formula of calculation of pension is similar to that of a Govt. Employee. ie.,
Average Salary   X   Service
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Maximum service for the calculation of service is 35 yrs. If a member has maximum service, pension will be:

Average Salary
2

The Average Salary here refers is named as pensionable salary in the scheme. It is arrived by considering the average contributing salary preceeding 12 months from the date of exit

Eventhough you may be drawing Rs.20,000/- as salary per month, your company need to contribute only Rs. 541/- towards pension fund. Pension is less, why?

Here, the formula of calculation of pension is:

Past Service benifit + Pensionable service benefit   -   Proportionate reduction

subject to minimum pension specified for each group.
( X - Rs.800 , Y - Rs.600, Z - Rs.500 )

These three categories of members are defined with reference to their age as on 16.11.1995 as follows:

  • X : those who have not attained 48 years
  • Y : those who have attained 48 years but less that 53 years ; and
  • Z : those who have attained 53 years or more.

  • Past service benefit:Portion of pension amount because of your service before 15.11.1995(For the calculation of this you have to refer 2 tables)
  • Pensionable Service Benefit:Portion of pension amount because of your service after 15.11.1995(same as the calculation of pension who joined after 15.11.1995)
  • Proportionate reduction: if the past service is less than 24 years and past service benifit + Pensionable service pension is less than Rs.500/-
    Some more tips

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    Two Pension Capitalising Options are available:

    1. Commutation
    You can opt for commutation of pension and percentage of commutation. maximum% of commutation is 33.33%. In this case, the pension will be reduced by 33.33% and you gets 100 times of commuted value as lump sum. eg. If original Pension is Rs.1000/-, if opted for 33.33% commutation, the pension will be Rs. 667 and the lump sum amount is Rs. 333 x 100 = 33300. The commutation will not cease and the original pension will not be restored.
    If commuted, the pension after commutation will be taken as ORIGINAL Pension for the calculation of lumpsum amounts related to Capital Return.
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    2. Capital Return
    Three type of Capital Return Options are there:(The Capital Return Amounts are ADDITIONAL to all other usual benefits)

    Option No. 1 [under para 13(1)(1)]
    If opted, 10% of pension will be reduced. If original Pension is Rs. 1000/-, you get monthly pension of Rs. 900/-. On Member Pensioner's Death, Rs. 1000 x 100 (hundred times of pension) as lump sum will be paid to nominee (Nominee can be anyone including spouse).
    		Widow pension & 2 Children Pension will be paid as usual.

    Option No. 2 [under para 13(1)(2)]
    If opted, 10% of pension will be reduced. If original Pension is Rs. 1000/-, you get monthly pension of Rs. 900/-. On Member Pensioner's Death, 80% of pension will be given to Widow additional to her entitled widow pension and on the death or remarriage of widow, Rs. 1000 x 90 (ninety times of pension) to nominee as lump sum (nominee can not be spouse)Widow pension & 2 Children Pension will be paid as usual.

    Option No. 3 [under para 13(1)(3)]
    If opted, 12.5% of pension will be reduced. If original Pension is Rs. 1000/-, you get monthly pension of Rs. 875/-. This pension will be paid for a fixed period of 20 years only. In case the member dies before 20 years, the pension will be paid to his nominee for the balance period. On attaining this 20 years, Rs. 1000 x 100 (hundred times of pension) will be given to the member if he is alive, otherwise to his nominee.
    Widow pension & 2 Children Pension will be paid as usual.
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    Types of Pension

    Type of Pension Description
    Superannuation
    • If age is 58 years or more
    • 20 years or more service
    Retirement
    • If age is between 50 and 58 years
    • 20 years or more service
    Short Service (Cessation)
    • If age is above 50 years
    • 10 to 20 years of service
    Death While in Service
    • Atleast 1 months service
    Death Away from Service (Now not in service)
    • Age less than 58 years
    • Holding valid Scheme certificate or proof of service
    Nominee Pension
    • If no family member,Father or Mother
    • Member can nominate a person while in service
    Parent Pension
    • If no family member (ie, no spouse,offspring)
    • If no Nomination and to one of the Dependent Parent if alive
    Disability Pension
    • Certificate to the effect of permenent and 100% disability should be produced
    • Commutation not applicable
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    More detailed calculation of Pension and Tables relating to the calculation of Pension

    For a member who joined EPF before 15.11.1995 have 3 components in Pension calculation:

    (a)Past Service Benefit    (b)Pensionable Service Benefit    (c)Proportionate Reduction
    For those who joined after 15.11.1995, only the 2nd component, viz., Pensionable Service Benefit is applicable
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    1.  Past Service benefit: depends upon the wage as on 15.11.1995 and the service rendered in FPF '71 ( i.e. upto 15.11.1995 ) is as shown below:
    TABLE - A
    Past Service Benefit in Rs. Benefit in Rs.
    Wages as on 15.11.1995 is upto Rs.2500/ Wages as on 15.11.1995 is more than Rs.2500/-
    Upto 11 years 80 85
    More than 11 years but upto 15 years 95 105
    More than 15 years but less than 20 years 120 135
    Beyond 20 years 150 170

    The above amount is the benefit payable on completion of 58 years of age as on 16.11.1995.

    For the calculation of pension benefits before 58 years (if a member do not complete 58 years of age on 15.11.1995, his past service benefit will be increased by the below factor - Early pension cases ) the above benefit is multiplied by the TABLE - B factor to arrive at the past service benefit.

    TABLE - B
    If Years to 58 of age from 15.11.1995 is: then factor is:
    less than 1 year 1.049
    less than 2 years 1.154
    less than 3 years 1.269
    less than 4 years 1.396
    less than 5 years 1.536
    less than 6 years 1.689
    less than 7 years 1.858
    less than 8 years 2.044
    less than 9 years 2.248
    less than 10 years 2.473
    less than 11 years 2.720
    less than 12 years 2.992
    less than 13 years 3.29
    less than 14 years 3.621
    less than 15 years 3.983
    less than 16 years 4.381
    less than 17 years 4.819
    less than 18 years 5.301
    less than 19 years 5.810
    less than 20 years 6.414
    less than 21 years 7.056
    less than 22 years 7.761
    less than 23 years 8.537
    less than 24 years 9.390

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    2.   Pensionable Service benefit=

    pensionable salary   X   pen.service
    ---------------------------------------
    70

    subject to minimum of Rs.335, Rs. 438, Rs.635 for receiving early pension ( before 58 years ) for date of commencement of pension between 01/04/1993 and 15/11/2000, 16/11/2000 and 15/11/2005, 16/11/2005 respectively.
    AND
    subject to minimum of Rs.635, Rs.438, Rs.335 for receiving pension on or after 58 years for date of commencement of pension between 01/04/193 and 15/11/2000, 16/11/2000 and 15/11/2005 , 16/11/2005 respectively.

    (If member has joined after 15.11.1995, only Pensionable Service Benefit is applicable)

    3.  Proportionate reduction: arises if the past service is less than 24 years and aggregagte pension calculated is less that Rs.500/-

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    Pension in case of Member's Death

    Note:
  • In case of died member having family, pension is payable to (1) the spouse and (2) two children below 25 years of age. When a child reaches 25 years of age, the third child below 25 yrs of age will be given pension and so on.
    -- If the child is disabled, he may get pension till his death.
    -- In any case, only 2 children will receive pension at a time.

  • In case of member not having family, pension is payable to single nominated person.
    -- If not nominated and having dependend parent, pension is payable first to Father and then on father's death to Mother.
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    Pension Scheme membership
    1. If you are a EPF member after 15.11.1995, you will be automatically a member of Pension Scheme (EPS-95).
    2. If you exited from EPF before 16.11.1995, you may or may not be a Pension Scheme Member.

    If You have not yet opted for Pension Scheme

      You can not be a Pension Scheme Member   If:
    1. you settled your EPF Account before 16.11.1995
    2. you were not a member of Old Family Pension Scheme-1971
      You can be a Pension Scheme Member   If:
    1. you were a member of Old Family Pension Scheme-1971
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    I do not want this pension. I want money back
  • If your total service is less than 9.5 years, you can apply for Pension Fund Money back (Withdrawal benefit). i.e, as you are not entitled for pension, you may withdraw that amount.
  • The Withdrawal benefit calculation (as in the case of Pension Calculation) is depending on Average salary and total service, NOT related to your actual Balance in Pension Fund.
    EPF Pension scheme is very liberal insurance to your life after job. In case you die before 58 years of age after contributing to EPF Pension scheme for atleast 1 year, your family is entitled for Pension.
    You can add services at different companies by applying for     Scheme certificate , and if your total service is atleast 10 years, you can get pension from the age of 50 years on wards.
    You should think twice before opting for Withdrawal benefit
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    Pension is less, why?
    Pension depends on
    1. Your contribution to Pension Fund     and
    2. your service
    If your contribution is less, your pension will be less
    Contribution to Pension Fund was only 3.34% of wages before 16.11.1995.(From 16.11.1995, it is 8.33% of Wages). You may be drawing very high salary, but your contribution to Pension Fund will be only Rs. 541/- max. This is because, as per EPF scheme, employer has to remit 8.33% of actual salary or of Rs. 6500/- whichever is minimum. (Your company can contribute more with permission , while calculating pension, normally, wages will be limited to 6500/- as per prevailing laws)

    eg: ( we may consider a maxium pension case - this will occur only after 16.11.2025 [16.11.1995+35 years])
    Your averagevsalary=20,000/- per month
    Your service after 15.11.1995=35 years
    Then your pension is 6500/2 = Rs. 3250

    More Pension

    Under following conditions you can get higher pension: Then the amount of monthly pension shall be computed as below (for the service after 15.11.1995):
    pensionable salary   X   pen.service
    ---------------------------------------
    70


    If the contribution is paid on salary exceeding Rs. 6500/- per month from the date of commencement of EPS Scheme (16.11.1995) or from the date on which the salary exceeds Rs. 6500/- whichever is later and where 8.33% of the employers' share of contribution is remitted in to the pension fund. Pensionable salary shall be based on such higher salary.
    In the case of a new entrant to EPS(on or after 16.11.1995) the amount of monthly pension shall be computed as below:
    pensionable salary   X   pen.service
    ---------------------------------------
    70

    Top If you have 10 years of Service (contributing to EPS) and attained 50 years, you can apply for pension in Form-10D through your employer. If you have scheme certificate for all of your service, you may apply directly at EPF which coveres the area where your bank (SBI,Canara,Syndicate,....) is situated after attesting the filled up Form-10D by that bank manager with photo and other required documents which is mentioned in the Form-10D itself. You may calculate your possible approx. pension amount using the facility provided at the www.epfkerala.in or www.epfmalabar.nic.in site. As and when your pension is finalised you may see the details from the site using the facility 'new pensions' and before that, from 'My application status' This is a general reply applicable to all.