Pension Calculation of EPF

Dear Members,

Namashkar!

I want to know that, what is the calculation of Pension of PF.

Anjay Kumar

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Contributions as below:

EMPLOYEE PF CONTRIBUTION 12% OF WAGES
EMPLOYER PENSION CONTRIBUTION 8.33% OF WAGES; MAX UPTO 1250
EMPLOYER PF CONTRIBUTION 12% OF WAGES MINUS EMPLOYER PENSION CONTRIBUTION
EMPLOYER EDLI CONTRIBUTION 0.5% OF WAGES; MAX RS 75
EMPLOYER ADMIN CHARGES 0.5% OF WAGES

The formula to calculate the EPS pension is as follows: Monthly pension amount= (Pensionable salary X pensionable service) /70

What if a person has not rendered 10 years of contributory service?
When a person has not rendered 10 years of pensionable service on the date of exit or on attaining the age of 58 years, then he is entitled for a lump sum withdrawal or he may opt to receive scheme certificate provided on the date of exit if he has not completed 58 years. The quantum of lump-sum withdrawal depends on the number of years of contribution and is indicated in Table below.

Year of Service Proportion of Wages at Exit
1 1.02
2 1.99
3 2.98
4 3.99
5 5.02
6 6.07
7 7.13
8 8.22
9 8.33

The scheme also allows one to receive early pension from the age of 50 years or to defer the pension till the age of 60 years. However, when a member has opted to receive early pension or defer pension, the pension amount will get discounted or increased by 4% for every incomplete year for 58 years or for every year beyond 58 years as the case may be.

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