The EPS '95 Pension calculation procedure by the EPFO appears in an incorrect way. They are calculating the pension in 2 spells, i.e. (1) the pension up to 31/08/2014 with the pensionable salary of Rs. 6,500/- and (2) the pension from 01/09/2014 with the pensionable salary of Rs. 15,000/-, which is against the procedure stipulated in the EPS '95 manual.
The EPS '95 pension calculation formula is as follows: Pensionable Salary X Pensionable Service /70. Here, the pensionable salary is the average wages of the latest 60 months to the retirement date, which should be the one and only. But they are following methods against the method stipulated in the EPS '95 manual to reduce the monthly pension payout.
In this regard, I request the experts to disclose their valuable opinions/experiences.
From India, Secunderabad
Acknowledge(0)
Amend(0)
The EPS '95 pension calculation formula is as follows: Pensionable Salary X Pensionable Service /70. Here, the pensionable salary is the average wages of the latest 60 months to the retirement date, which should be the one and only. But they are following methods against the method stipulated in the EPS '95 manual to reduce the monthly pension payout.
In this regard, I request the experts to disclose their valuable opinions/experiences.
From India, Secunderabad
Acknowledge(0)Amend(0)
Dear Mr. Reddy,
The EPS '95 Pension Calculation Procedure is correct. Let me explain to you, as already mentioned above: "Here, the pensionable salary is the average wages of the last 60 months up to the retirement date, which should be the one and only."
So as of now (30th Nov '18), if we count the last 60 months, then it will be (Dec '13 to Nov '18). The wage ceiling for EPS increased to Rs. 15,000 (wef 01st Sep '14). Hence, the average wages of the last 60 months will be:
- 51 months @ Rs. 15,000/m (Sep '14 to Nov '18) = Rs. 15,000/51*12
- 09 months @ Rs. 6,500/m (Dec '13 to Aug '18) = Rs. 6,500/9*12
That will be the average wages for EPS Calculation = Rs. 12,196. For more clarification, let me tell you that in respect of a person who will retire on or after 01st Sep '2019, the average salary will be Rs. 15,000 itself (if EPS contributes up to the wage ceiling amount). Because the whole 60-month period will be related to Rs. 15,000 wages, and pro-rate calculation will not be required.
Hope the matter is cleared now. I seek more expert views on the matter, especially from Mr. Abbas.
From India, Delhi
Acknowledge(0)Amend(0)
231The EPS '95 Pension Calculation Procedure is correct. Let me explain to you, as already mentioned above: "Here, the pensionable salary is the average wages of the last 60 months up to the retirement date, which should be the one and only."
So as of now (30th Nov '18), if we count the last 60 months, then it will be (Dec '13 to Nov '18). The wage ceiling for EPS increased to Rs. 15,000 (wef 01st Sep '14). Hence, the average wages of the last 60 months will be:
- 51 months @ Rs. 15,000/m (Sep '14 to Nov '18) = Rs. 15,000/51*12
- 09 months @ Rs. 6,500/m (Dec '13 to Aug '18) = Rs. 6,500/9*12
That will be the average wages for EPS Calculation = Rs. 12,196. For more clarification, let me tell you that in respect of a person who will retire on or after 01st Sep '2019, the average salary will be Rs. 15,000 itself (if EPS contributes up to the wage ceiling amount). Because the whole 60-month period will be related to Rs. 15,000 wages, and pro-rate calculation will not be required.
Hope the matter is cleared now. I seek more expert views on the matter, especially from Mr. Abbas.
From India, Delhi
Acknowledge(0)Amend(0)
Dear Mr. Pan Singh Dangwal,
You have arrived at the average pensionable salary as follows, which I can't understand. The average wages of the last 60 months will be:
51 months @ 15,000/m (Sep '14 to Nov '18) = 15,000/51*12
09 months @ 6,500/m (Dec '13 to Aug '18) = 6,500/9*12
That will be the average wages for EPS calculation = 12,196.
I feel that it should be as follows:
51 months @ 15,000/m (Sep '14 to Nov '18) = 15,000*51 = 765,000
09 months @ 6,500/m (Dec '13 to Aug '18) = 6,500*9 = 58,500
--------------------------------------------------------
Total: 823,500 / 60 = 13,725
--------------------------------------------------------
Thus, the average wages for EPS calculation should be 13,725.
Please correct me if I am incorrect, and also you have not given clarification on the pension calculation system adopted by EPFO. Please let me know if the EPS pension calculation done in 2 spells is correct or not.
From India, Secunderabad
Acknowledge(0)Amend(0)
You have arrived at the average pensionable salary as follows, which I can't understand. The average wages of the last 60 months will be:
51 months @ 15,000/m (Sep '14 to Nov '18) = 15,000/51*12
09 months @ 6,500/m (Dec '13 to Aug '18) = 6,500/9*12
That will be the average wages for EPS calculation = 12,196.
I feel that it should be as follows:
51 months @ 15,000/m (Sep '14 to Nov '18) = 15,000*51 = 765,000
09 months @ 6,500/m (Dec '13 to Aug '18) = 6,500*9 = 58,500
--------------------------------------------------------
Total: 823,500 / 60 = 13,725
--------------------------------------------------------
Thus, the average wages for EPS calculation should be 13,725.
Please correct me if I am incorrect, and also you have not given clarification on the pension calculation system adopted by EPFO. Please let me know if the EPS pension calculation done in 2 spells is correct or not.
From India, Secunderabad
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Compendium of Imp. judgments on EPS’95 Revision of Pension on higher wages by Parveen Kohli (981.pdf