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Calculation of Pension

The document provides information to help pensioners from Vizag Steel calculate their monthly pension amounts, including factors like pensionable service, salary, past service benefits, and weightage for completing 20+ years of service. An example calculation is provided for a member who retired in 2010 to demonstrate how to determine the pension amount both with and without salary restrictions. Instructions are also given for calculating pensions for those who retired after September 2014.

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134 views2 pages

Calculation of Pension

The document provides information to help pensioners from Vizag Steel calculate their monthly pension amounts, including factors like pensionable service, salary, past service benefits, and weightage for completing 20+ years of service. An example calculation is provided for a member who retired in 2010 to demonstrate how to determine the pension amount both with and without salary restrictions. Instructions are also given for calculating pensions for those who retired after September 2014.

Uploaded by

ramki240
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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VIZAG STEEL PENSIONERS’ ASSOCIATION

Dear Members,

Many of our members have been requesting for a method of calculation of pension as per the
Act to help our friends to arrive at their pension amount both the present pension as also if opted and
availed the revised pension on the total salary.

The following information and factors are necessary to calculate the monthly pension:

1. Let us categorise the calculations for those retired before 1.9.2014 and those who retired after
1.9.2014.
2. Important terms are a) Pensionable service for EPS b) Pensionable salary for EPS c)Past service
benefit d) weightage of 2 yrs of pensionable service on completion of 20 yrs of service.
a) Pensionable Service : No.of years of contribution towards EPS from 16.11.1995 till attaining
58yrs.(if the fraction is more than or equal to 6 months, it will be rounded to next year; if it is
less than 6 months it will be ignored not considered for calculation.)
b) Pensionable salary: It is the last 12 months average salary (Basic+DA)- (So far if option for
higher pension is not given earlier, the pensionable salary is restricted to either 5000/- or
6500/-.) However, for the retirees after 1.9.2014, the average of sixty months preceding the
date of exit.
c) Past Service benefit: Past Service is the period of service rendered by an employee from the
date of joining PF till 15th Nov. 1995.(the figures as shown in the table for four categories
on the mentioned salary should be multiplied by the relevant factor against the No,of
years of Table-B)
d) Weightage of 2yrs of Pensionable service: In case an employee completed 58 yrs of age and
completed 20yrs of service or more, his pensionable service will be increased by 2yrs for
calculation purpose.

EXPLANATION WITH AN EXAMPLE:

Example: Date of birth: 20.8.1952; Date of joining : 10.4.1981; 58yrs Exit: 20.8.2010;
Salary as on 1.8.2010 Basic: Rs.48850/- + DA Rs.17146/- =Rs.65996/- (Average is considered for
12months)
(Whereas as per the Act it is restricted as Rs.6500/-)
Basic as on 1.11.1995 Basic :Rs.4850/- + DA Rs. 1445/-(for the purpose of past service benefit)
(a) is the calculation of present drawn pension (b)is calculation on Actual salary

Pensionable Service: 14yrs 9 months,10days( 5390 days) rounded off to 15yrs.


(a)Pensionable salary: Rs.6500/-
(a)Pension as per the formula: 6500 x 15/70 =Rs.1393/-
(b) on Full salary: 65996 x 15/70 =14,142/- pm
Whereas, becomes eligible for 2 yrs weightage therefore, the pensionable service becomes 17yrs
(a)Now once again as per formula = 6500 x 17/70 = 1579/-
(b) on full salary :65996 x 17/70 =16,027/-pm
Past service benefit: (as referred to the two tables: 105 x 2.826 = Rs. 296.73/- (say 297)
(a)Now the grand total of monthly pension= 1579 + 297 = Rs. 1876/-pm
(b) on full salary 16,027+297=16,324/-pm

The tentative increase of higher pension per month: 16,324 – 1,876 =14,448/- pm

Members thus may please calculate and arrive at figures of payment due to EPFO and also the arrears
that one is expected to get Subject to the interest rates etc which are not known now.

In case of retirees after 1.9.2014 also the same procedure should be followed but the Pensionable
salary as per the Act is restricted to Rs.15000/- instead of Rs.6500/- and the Average salary for 60
months to be taken for calculation.

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