Dear All,

1) Who will be covered by the Pension Scheme?
Every member of the ceased Family Pension Scheme 1971 and anyone who joins any covered establishment on or after 16-11-95 is compulsory to join this scheme, provided his/her salary/wage is less than Rs. 6500/- per month at the date of appointment.

2) If employee is a member of Employees' Family Pension Scheme and he/she has left employment at 48 years of age with 12 years of service to his/her credit. When will he/she be eligible to receive pension?
He/She will receive pension on reaching age of 58 years.

3) Can member not get pension earlier?
Yes, he/she may receive pension on reaching age of 50 years. In that case pension payable from age of 50 years will be reduced by 3% for each year falling short of 58.
Eg. If a person of 56 years age opt for reduced pension, and his calculated pension amount is Rs. 1000/-, his reduced pension will be  1000   X   (0.97)²  = Rs.941/-

4) Member's pension has been worked out based on salary at age 48 and service upto 48. Will this pension remain same until he/she reach age 58?
No, the pension will be increased on subsequent actuarial valuation along with vested percentage.

5) Why are there two pension formulas?
For the past service upto 15.11.95, there is a table to calculate the benefits.  For actual service from 16.11.95 onwards there is a formula which is Pension formula is 1/70 * Pensionable Salary * Pensionable Service.

From those rendering 20 years service, pensionable service is enhanced by two years. This is inline with concept that maximum pension should be paid to the longest service employee.

6) If employee has reached age of 50 years, what does he/she has to do to receive monthly pension?
As and when he / she is quitting the employment, they can apply for reduced monthly pension.

7) Employee is a member of ESIC. On his disablement he will receive benefit from there as well. Will his benefit under Employees' Pension Scheme be affected by this?
No, his benefit under the scheme is due to his contribution under The Employees' Pension Scheme '95. Accordingly the disablement pension will not be affected notwithstanding his availing benefit elsewhere.

8) Employee has left his employment on reaching age 45. He has deferred his pension till 58. He has become permanently disabled after 3 years from leaving service. Does he receive disablement pension?

No, he will receive disablement pension from date of disablement only if such disablement occurs while in service.

9) In case of employee's death in service, what benefit will be available to his family?
Widow will receive pension :-
a) The pension as he would have received had he retired on the day of death or
b) Such widow pension would have been payable under erstwhile Family Pension Scheme or
c) Rs. 450/- per month whichever is highest.
In addition 25% of widow pension with minimum of Rs. 150/- for each child (not exceeding two children at a time) will be paid until the youngest child reaches 25 years of age.

10) Employee has left covered establishment after 12 years in service and he has not taken withdrawal benefit. He has not reached age 58. In case he dies during deferment of pension what benefit will widow receive?
Widow will receive pension :-
a) Pension that he would have received had he retired on the day of death, or
b) Family pension payable under erstwhile Family Pension Scheme, or
c) Rs. 450/- per month whichever is the highest.

11) Employee has left service with 8 years of service. He has not taken refund of contribution. He has not reached age 58. If he dies during deferment what benefit will his widow receive?
She will receive widow pension as prescribed and not the retirement pension.

12) Employee has made an Option-1 i.e. to receive 90% of original monthly pension. What capital return on his death?
100 times of original pension.

13) Employee has opted for Option-1 where his wife is nominee. Does his wife get widow pension after his death even though she will receive capital sum?
Yes, she will get 50% of pension last drawn by him or Rs. 450 p.m. whichever is the highest in addition to payment of Return of Capital.

14) What is Commutation?
It is the option to receive a capital sum today instead of receiving a monthly pension for rest of your life.

15) What is the rate of commutation?
It is upto 1/3rd of the Original Pension.  Suppose the original pension is Rs.600/-, the commutation value is Rs.20,000/-.  On commutation, the pension payable will be Rs. 400/-.

You may calculate your pension by clicking the following link 

        http://www.epfkerala.in/calcpenwb.html

Warm Regards,

Deepak Tanwar

CA-Inter