EmpIoyee PensIon Scheme EmpIoyee PensIon Scheme

Employee Pension Scheme Employee Pension Scheme

The purpose of the scheme Is to provIde for
-superannuatIng pensIon, retIrIng pensIon or permanent total dIsablement pensIon to the
employees.
-WIdow or wIdower's pensIon, chIldren pensIon or orphan pensIon payable to the
benefIcIarIes employees.
SaIIent Features of the EmpIoyees PensIon Scheme 15 (EPS-5).
-ThIs scheme Is applIcable to all members who are covered under ProvIdent Fund Act after
15.11.1995
-t replaces the prevIous Employees FamIly Scheme 1971
-f member Is alIve, pensIon to member
-f member Is not alIve, PensIon to spouse and two chIldren below 25 years of age
ApplIcable to all PF subscrIbers IncludIng exempted establIshments contrIbutIng to EPS
Scheme.
FundIng of the PensIon Scheme FundIng of the PensIon Scheme
An amount equal to 8.JJ of pay or Fs 541/ ( whIchever Is lesser) Is pooled Into the EPS from the
Employer's contrIbutIon.
Example: f a PF member gets Fs. 1000/ as monthly wages and he and hIs employer contrIbutes
12 each (Total of Fs. 240)
Fs. 120 + Fs.J7 =157 goes to ProvIdent Fund and Fs. 8J goes to PensIon Fund.
The Central Covernment wIll also contrIbute at 1.16 of the pay of the member.
Pay means basIc wages, wIth dearness allowance, retaInIng allowance and cash value of food concessIons
admIssIble, If any
EIIgIbIIIty to under EPS scheme EIIgIbIIIty to under EPS scheme
|InImum 10 years elIgIble servIce wIll entItle for member pensIon. The aggregate of actual
servIce and the 'past servIce' shall be treated as elIgIble servIce. The fractIon of servIce for sIx
months or more shall be treated as one year and the servIce less than sIx months shall be Ignored.
aIcuIatIon of PensIon aIcuIatIon of PensIon
|onthly |ember PensIon |onthly |ember PensIon - -
PensIonabIe SaIary PensIonabIe SaIary X X PensIonabIe ServIce PensIonabIe ServIce
70 70
|axImum |axImum PensIonable PensIonable servIce for the calculatIon of servIce Is J5 yrs. f a member servIce for the calculatIon of servIce Is J5 yrs. f a member
has maxImum servIce, pensIon wIll be: has maxImum servIce, pensIon wIll be:
PensIonabIe SaIary PensIonabIe SaIary
2 2
Those who joIned 8EFDFE 15.11.1995 ( pensIon Is also payable for membershIp perIod under ceased FPS71 as
past servIce benefIt based on factor formula of table E schedule 8)
* * PensIonabIe SaIary PensIonabIe SaIary - - It means the average saIary of the member drawn durIng the Iast 12 months.The It means the average saIary of the member drawn durIng the Iast 12 months.The
maxImum IImIt of pensIonabIe saIary Is Ps. 6500l maxImum IImIt of pensIonabIe saIary Is Ps. 6500l- -Ph. I.e. If an empIoyee receIved Ps. 10,000l Ph. I.e. If an empIoyee receIved Ps. 10,000l- - Ph as basIc Ph as basIc
saIary, for the purpose of caIcuIatIng pensIon under FPS, the basIc saIary Is consIdered to be Ps. 6500l saIary, for the purpose of caIcuIatIng pensIon under FPS, the basIc saIary Is consIdered to be Ps. 6500l- - Ph Ph
* * Pensonable Servce Pensonable Servce - - t means servce oj the member jor whch contrbuton jor the enson jund s t means servce oj the member jor whch contrbuton jor the enson jund s
made. ln the case oj the member who suerannuates on attanny the aye oj 58 years, and/or who has made. ln the case oj the member who suerannuates on attanny the aye oj 58 years, and/or who has
rendered 20 years ensonable servce or more, hs ensonable servce shall be ncreased by addny a rendered 20 years ensonable servce or more, hs ensonable servce shall be ncreased by addny a
weyhtaye oj 2 years. weyhtaye oj 2 years.
Types of honthIy PensIon Types of honthIy PensIon
- - hember PensIon hember PensIon - - Dn superannuatIon l PetIrementl Short servIce. Dn superannuatIon l PetIrementl Short servIce.
- - 0IsabIement PensIon 0IsabIement PensIon - - Dn permanent and totaI dIsabIement durIng empIoyment Dn permanent and totaI dIsabIement durIng empIoyment
- - WIdow PensIon WIdow PensIon - - After death In servIce or death after retIrement of the member from the After death In servIce or death after retIrement of the member from the
company. ( company. (50X of monthIy members pensIon subject to a mInImum of Ps. 250l 50X of monthIy members pensIon subject to a mInImum of Ps. 250l- - Ph) Ph)
- - hIIdren PensIon hIIdren PensIon - - After death In servIce or death after retIrement of the member from the After death In servIce or death after retIrement of the member from the
company, chIIdren pensIon Is gIven two chIIdren ( company, chIIdren pensIon Is gIven two chIIdren (25X of the wIdow pensIon subject to a mInImum 25X of the wIdow pensIon subject to a mInImum
of Ps. 115l of Ps. 115l- - Ph) Ph) In addItIon to wIdow pensIon. If there Is no wIdow pensIon, chIIdren are In addItIon to wIdow pensIon. If there Is no wIdow pensIon, chIIdren are
entItIed for orphan pensIon entItIed for orphan pensIon ( 75X of wIdow pensIon subject to a mInImum of Ps. 170l ( 75X of wIdow pensIon subject to a mInImum of Ps. 170l- -Ph) Ph)
- - Peturn of apItaI Peturn of apItaI - - Peduced pensIon and avaII of return of capItaI under any three Peduced pensIon and avaII of return of capItaI under any three
aIternatIves gIven In the page ( sIIde number 10) . aIternatIves gIven In the page ( sIIde number 10) .
- - NomInee PensIon NomInee PensIon - - upon death of the members havIng no famIIy, pensIon wIII paId to the upon death of the members havIng no famIIy, pensIon wIII paId to the
nomInee nomInee (EquaI to that of wIdow pensIon ) (EquaI to that of wIdow pensIon )
- - SuperannuatIon PensIon SuperannuatIon PensIon
If age Is 58 years or more If age Is 58 years or more
20 years or more servIce 20 years or more servIce
- - PetIrement PensIons PetIrement PensIons
If age Is between 50 and 58 years If age Is between 50 and 58 years
20 years or more servIce 20 years or more servIce
- - Short ServIce PensIon Short ServIce PensIon
10 to 20 years of servIce 10 to 20 years of servIce
- - 0IsabIIIty PensIon 0IsabIIIty PensIon
PermanentIy and totaIIy unfIt for the empIoyment whIch the member PermanentIy and totaIIy unfIt for the empIoyment whIch the member
was doIng at the tIme of such dIsabIement . was doIng at the tIme of such dIsabIement .
hembershIp wIth one months contrIbutIon to the pensIon fund Is hembershIp wIth one months contrIbutIon to the pensIon fund Is
enough. enough.
uantum of pensIon as per pensIon formuIa subject to mInImum Ps. uantum of pensIon as per pensIon formuIa subject to mInImum Ps.
250l 250l- - Ph Ph
honthIy member PensIon EIIgIbIIIty honthIy member PensIon EIIgIbIIIty
f the member completes 20 years, the |onthly |ember PensIon f the member completes 20 years, the |onthly |ember PensIon
PensIonabIe SaIary PensIonabIe SaIary X X PensIonabIe ServIce PensIonabIe ServIce
70 70
f the member completes less than 20 years, the monthly member pensIon The amount arrIved as per the f the member completes less than 20 years, the monthly member pensIon The amount arrIved as per the
above formula, shall be reduced at the rate of 6 for every year by whIch the elIgIble servIce falls short of above formula, shall be reduced at the rate of 6 for every year by whIch the elIgIble servIce falls short of
20 years, subject to a maxImum reductIon of 25 20 years, subject to a maxImum reductIon of 25
The member can contInue In servIce whIIe receIvIng thIs pensIon Dn attaInIng 58 The member can contInue In servIce whIIe receIvIng thIs pensIon Dn attaInIng 58
Years of age, a EPF member cease to be a member of EPS automatIcaIIy Years of age, a EPF member cease to be a member of EPS automatIcaIIy
The member need not be In servIce If he compIetes 10 years servIce In FPS The member need not be In servIce If he compIetes 10 years servIce In FPS
honthIy member PensIon aIcuIatIon honthIy member PensIon aIcuIatIon
SItuatIon I SItuatIon I - -
0eath of the memberl 0eath whIIe In servIce 0eath of the memberl 0eath whIIe In servIce - -( (WIdow PensIon hIIdren WIdow PensIon hIIdren
PensIonl Drphan PensIonl NomInee PensIon) PensIonl Drphan PensIonl NomInee PensIon)
hember shouId compIete at Ieast one month's servIce hember shouId compIete at Ieast one month's servIce
If unmarrIed, pensIon to nomInee or to dependent parent Is payabIe wIthout any If unmarrIed, pensIon to nomInee or to dependent parent Is payabIe wIthout any
other condItIons . other condItIons .
In thIs case chIIdren pensIon l orphan pensIon Is payabIe to maxImum of 2 chIIdren In thIs case chIIdren pensIon l orphan pensIon Is payabIe to maxImum of 2 chIIdren
upto 25 years. ( In case more than two chIIdren the eIIgIbIIIty of pensIon wIII run upto 25 years. ( In case more than two chIIdren the eIIgIbIIIty of pensIon wIII run
from the eIdest to the younger chIId In order). from the eIdest to the younger chIId In order).
FamIIy PensIon FamIIy PensIon - - EIIgIbIIIty EIIgIbIIIty
SItuatIon II SItuatIon II
0eath of the member 0eath when 0eath of the member 0eath when NDT NDT In servIce In servIce- -( (WIdow PensIon hIIdren PensIon l WIdow PensIon hIIdren PensIon l
Drphan PensIonl NomInee PensIon) Drphan PensIonl NomInee PensIon)
If a member dIes even when not In servIce, hoIdIng a vaIId scheme certIfIcate and not compIeted If a member dIes even when not In servIce, hoIdIng a vaIId scheme certIfIcate and not compIeted
58 years of age. 58 years of age.
If unmarrIed, pensIon to nomInee or to dependent parent Is payabIe onIy when the member has If unmarrIed, pensIon to nomInee or to dependent parent Is payabIe onIy when the member has
rendered 10 years of servIce rendered 10 years of servIce
SItuatIon III SItuatIon III
0eath of the empIoyee WhIIe gettIng PensIon from FPS 0eath of the empIoyee WhIIe gettIng PensIon from FPS - -( (WIdow PensIon hIIdren PensIon l WIdow PensIon hIIdren PensIon l
Drphan PensIonl NomInee PensIon) Drphan PensIonl NomInee PensIon)
WIdow PensIon WIdow PensIon - - 50X of the monthIy member pensIon subject to mInImum Ps. 250 l 50X of the monthIy member pensIon subject to mInImum Ps. 250 l- - Ph Ph
hIIdren PensIon hIIdren PensIon - - 25X of the monthIy member pensIon to each chIIdren (maxImum number 2) 25X of the monthIy member pensIon to each chIIdren (maxImum number 2)
upto attaInIng 25 years of age. upto attaInIng 25 years of age.
NomInee PensIon NomInee PensIon - - EquaI that of wIdow pensIon. EquaI that of wIdow pensIon.
FamIIy PensIon FamIIy PensIon - - EIIgIbIIIty EIIgIbIIIty
DptIons for Peturn of apItaI DptIons for Peturn of apItaI
AIternatIve 1 AIternatIve 1
PevIsed pensIon durIng IIfe tIme of member wIth return of capItaI on hIs death. PevIsed pensIon durIng IIfe tIme of member wIth return of capItaI on hIs death.
AIternatIve 2 AIternatIve 2
PevIsed pensIon durIng IIfe tIme of member, further reduced pensIon durIng IIfe tIme of PevIsed pensIon durIng IIfe tIme of member, further reduced pensIon durIng IIfe tIme of
the wIdow or her remarrIage whIchever Is earIIer and return of capItaI on wIdow's the wIdow or her remarrIage whIchever Is earIIer and return of capItaI on wIdow's
death l remarrIage death l remarrIage
AIternatIve 3 AIternatIve 3
PensIon for a fIxed perIod of 20 years not wIth standIng whether the member IIves for PensIon for a fIxed perIod of 20 years not wIth standIng whether the member IIves for
that perIod or not that perIod or not
%he employee is eligible to pension may opt to draw Ior reduced pension
and avail oI return oI capital under any one oI the three alternatives given
below.
ExampIe of CaIcuIation ExampIe of CaIcuIation
Date of Birth Date of Birth : 31.1.1947
CompIeted 58 Years on CompIeted 58 Years on :- 31.1.2005
Age as on 16.11.95 Age as on 16.11.95 :- 48 years
FPF Membership FPF Membership :- 18 Years ( assumed membership of FPF w.e.f 1977)
EPS 95 Membership EPS 95 Membership :- 10 Years
Pay as on 16.11.95 Pay as on 16.11.95 :- above Rs 2500/-
Past service benefit Past service benefit :- Rs. 135 X 5.301 = Rs.715.635
(Factor formuIa of tabIe scheduIe of the prevIous EFPS Factor formuIa of tabIe scheduIe of the prevIous EFPS - - 171) 171)
Pension payabIe Pension payabIe : #s. 715.635 + ( #s.6500 X10/70) #s. 715.635 + ( #s.6500 X10/70)
#s. 715.635+ #s.928.57 #s. 715.635+ #s.928.57
#s.1644.205 #s.1644.205
ExampIe of CaIcuIation ExampIe of CaIcuIation
Date of Birth Date of Birth :- 11.7.1951
CompIeted 58 Years on CompIeted 58 Years on :- 10.7.2009
Age as on 16.11.95 Age as on 16.11.95 :- 34years
FPF Membership FPF Membership :- 15 Years ( assumed membership of FPF w.e.f 1980)
EPS 95 Membership EPS 95 Membership :- 13 Years
Pay as on 16.11.95 Pay as on 16.11.95 :- above Rs 2500/-
Past service benefit Past service benefit :- Rs. 105 X 3.292 = Rs.345.66
(Factor formuIa of tabIe scheduIe of the prevIous EFPS Factor formuIa of tabIe scheduIe of the prevIous EFPS - - 171) 171)
Pension payabIe Pension payabIe #s. 345.66 + ( #s.6500 X13/70) #s. 345.66 + ( #s.6500 X13/70)
#s. 345.66+ #s.1207.14 #s. 345.66+ #s.1207.14
#s.1552.80 #s.1552.80
ScheduIe of the prevIous EFPS ScheduIe of the prevIous EFPS - - 171 171
(n) FACTDF (n) FACTDF
(1) (2) (1) (2)
Less than 1 1.049 Less than 1J J.292
Less than 2 1.154 Less than 14 J.621
Less than J 1.269 Less than 15 J.98J
Less than 4 1.J96 Less than 16 4.J81
Less than 5 1.5J6 Less than 17 4.819
Less than 6 1.689 Less than 18 5.J01
Less than 7 1.858 Less than 19 5.81
Less than 8 2.044 Less than 20 6.414
Less than 9 2.248 Less than 21 7.056
Less than 10 2.47J Less than 22 7.761
Less than 11 2.72 Less than 2J 8.5J7
Less than 12 2.992 Less than 24 9.J9
%he End