| 1. DEFINITION |
Employee's Pension Scheme is a survivor, old age and disability pension scheme.The earlier Family Pension Scheme, 1971 offered only one type of benefit,mainly..survival benifit i.e. payment of pension to widow/widower on death of the member in service.On the other hand the new scheme caters for three types of contingencies:- |
| a) Survivor pension |
: |
If death occurs during service period |
| b) Old age Pension |
: |
Pension on superannuation. |
| c) Permanent Disability Pension |
: |
In the event of member suffering permanent disability while in service. |
|
| 2. CHARACTERISTICS |
| In the Scheme three scales of pensionary benefits have been offered
according to the length of service. |
| 2.1 For service below 10 years. |
Return of contribution on exit from employment-Table-D
Example : Suppose a member exists from employment after four years of
service his wage on exist in Rs. 4000/-.Return of contribution will be
calculated as Rs. 4000 X 4.18 of wages on exit i.e. Rs. 16,720/-. |
| 2.2 Service above 10 years but below 20 years. |
In the first instance, pension will be calculated by applying the formula
| i.e. |
Pensionable Salary X Pensionable Service |
|
---------------------------------------------------------- |
| |
70 |
Say, a member has done 18 years of pensionable service, Pensionable Salary determined is Rs. 4000/-. Pension payable to him will be Rs. 1029/- |
| 2.3 Service over 20 years. |
| Full pension according to the formula stated above, it is to be noted here
that for rendering 20 years of pensionable service or more, member's
pensionable service shall in all cases be increased by adding 2 years. In
other words, 20 years actual pensionable service will be treated as 22
years of pensionable service for calculation of pension. |
| 2.4 Special provisions for existing member: |
| Special provisions have been made for calculation of pension in case of
member who was a member of the ceased Family Pension Scheme 1971
and who has attained the age of 48 years on Nov 16 1995 or a member
who has attained the age of 48 years but less than 58 years on Nov 16,
1995 or a member who has attained the age of 53 years or more on Nov
16, 1995. In the aforesaid cases the formula for calculating Pension will
be as follows:- |
2.4.a Member has not attained the age of 48 years on 16/11/1995 :
Pension is determined by the above formula,
| i.e. |
Pensionable Salary X Pensionable Service |
|
---------------------------------------------------------- |
| |
70 |
For the period of Pensionable service rendered from Nov 16, 1995 or
Rs. 635/- whichever is more plus past service benefits as under : |
| Sr.
No. |
Year
of
past service |
*The past service benefit payable on completion of 58
yrs. of age on 16/11/1995 |
| |
|
Salary
upto Rs. 2500/- p.m. |
Salary
more than Rs. 2500/- p.m. |
| |
Column (1) |
Column (2) |
Column (3) |
| 1 |
Upto 11 years |
80 |
85 |
| 2 |
More than 11 years but upto 15
years. |
95 |
105 |
| 3 |
More than 15 years |
120 |
135 |
| 4 |
Beyond 20 years |
150 |
170 |
|
| Subject to a minimum of Rs. 800/- p.m. provided the past service benefit is 24 years. If the member’s aggregate service is less than 24 years, Pension and the benefits computed as above will be reduced proportionately to a minimum to Rs. 450/p.m . |
Example :-
| Age as on 16/11/1995 |
= |
38 years. |
| Pensionable Salary say |
= |
Rs. 4000/- |
| Pensionable Service say |
= |
7 years |
| Date of Birth |
= |
01/07/1957 |
| Date of Joining |
= |
01/08/1980 |
| Date of Leaving |
= |
31/10/2002 |
| Date of attainment of age 58 years
|
= |
01/07/2015 |
| Past service upto 15/11/1995 |
= |
15 years |
| Period between 16/11/1995 and 01/07/2015 |
= |
19 years 9 months i.e. 20 years. |
| Monthly member's Pension |
= |
(4000 X 7) /
70 |
| |
= |
400 i.e. < Rs.
635/- |
| hence
MMP |
= |
Rs. 635/- |
| Past Service Benefit as per table for 15 years |
= |
105 X 6.414 =
673 |
| Minimum Past Service Benefit Payable |
= |
Rs 800/-
for 24 years |
| Actual Monthly
member's Pension Payable |
= |
Aggregate of Monthly Member's Pension + Past
Service Benefit
i.e. 635 + 673 = 1308/- |
| Aggregate Service |
= |
Past Service + Pensionable Service i.e. 22 years i.e. less than 24 yrs |
| Proportionate Pension for 22 years |
= |
(1308 X 22) / 24 =
1199/- |
| |
|
|
|
| 2.4.b. |
Member has attained the age of 48 years but less than 53 years on
16/11/95 :
Pension as determined by the above mentioned formula
| i.e. |
Pensionable Salary X Pensionable Service |
|
---------------------------------------------------------- |
| |
70 |
for the period of service rendered from 16/11/1995 or rs. 438/- p.m.
whichever is more plus past service as laid down in para 12(3) subject
to a minimum of Rs. 600/- p.m. in case the past service is 24 years. If it
is less than 24 years, pension payable and the past service benefit
taken together shall be proportionately less subject to minimum of Rs
325/- p.m. |
Example :-
| Age as on 16/11/1995 |
= |
50 years |
| Pensionable Salary say |
= |
Rs. 4000/- |
| Pensionable Service say |
= |
7 years |
| Date of Birth |
= |
30/11/1945 |
| Date of Joining |
= |
01/07/1975 |
| Date of Leaving |
= |
1/12/2002 |
| Past Service
(FPF) |
= |
20 years |
| Date of attainment of 58 years |
= |
30/11/2003 |
| Period between 16/11/1995 and 30/11/2003 |
= |
8 years |
| Monthly
Member's Pension |
= |
(4000 X 7) /
70 |
| |
= |
400 |
| Minimum Pension Payable |
= |
Rs.
438/- Hence MMP = Rs. 438/- |
| Past Service Benefit: |
|
|
| Past Service benefit for 20 years as per table |
= |
170 X 2.248 = 382 |
| Minimum Past Service Benefit Payable |
= |
Rs. 600/- for 24
years |
| Proportionate Minimum Past Service Benefit for 20 yrs. |
= |
(600 X 20)/24=Rs
500 |
Since Actual Past Service Benefit is less than Proportionate Minimum
Past Service Benefit
Past Service Benefit |
= |
Rs. 500/- |
| Actual
Monthly Member's Pension Payable |
= |
(Aggregate of Monthly Member's Pension) +
(Past Service Benefit)
=438 + 500 = 938/- |
Since Total Service is more than 24 years
hence Monthly
Member's Pension Payable |
= |
Rs. 938/- |
| |
|
|
|
| 2.4.c |
Member has attained the age of 53 years or more on 16/11/95:
Pension as determined by the above formula
| i.e. |
Pensionable Salary X Pensionable Service |
|
---------------------------------------------------------- |
| |
70 |
for the period of service rendered from from 16/11/95 till the date of
exit
OR
Rs. 335/- p.m. whichever is more plus past service benefit as
provided in para 12(3) subject to minimum of Rs. 500/- p.m. (both
together) in case past service period is 24 years, if it is less than 4
years, pension payable and past service benefit shall be
proportionately lesser subject to a minimum of Rs. 265/- p.m. |
Example :-
| Age on
16/11/1995 |
= |
55 years |
| Date of Birth |
= |
01/08/1940 |
| Pensionable
Salary |
= |
Rs. 4,000/- |
| Date of Joining |
= |
1/03/1971 |
| Date of
Leaving |
= |
31/07/1998 |
| Pensionable Service |
= |
2
years, 9 months = 3 years |
| Past
Service(FPF) |
= |
24 years |
| Date of attainment of
58 years |
= |
31/07/1998 |
| Period bet
16/11/1995 and 31/07/1998 |
= |
2 years, 9
months |
| Monthly Member's
Pension |
= |
(4000 X 3) / 70 |
| |
= |
171.42 |
| |
= |
171/- |
| Since Minimum
Pension Payable |
= |
Rs. 335/- is more than actual
pension calculated, |
| The
monthly Member's Pension |
= |
Rs. 335/-
p.m. |
| Past Service Benefit : |
|
|
| Past Service
Benefit for 24 years as per
Table |
= |
170 X 1.269=215.73 i.e. 216/- |
| Since
Minimum Past Service Benefit Payable for 24 years Service |
= |
Rs.500/- |
| The Past Service Benefit |
= |
Rs 500/- |
| Actual Monthly Member's Pension
Payable |
= |
Aggregate of Monthly Member's
Pension+Past Service
|
| Benefit |
= |
335 + 5 00 =
835/- |
Aggregate Service more
than 24 years
Hence Member's
Pension |
= |
835/- |
|
| 3. EARLY PENSION ON CESSATION OF EMPLOYMENT |
Old age pension on account of superannuation/retirement is
normally payable on attaining the age of 58 yrs. However member
can opt for taking earlier than 58 yrs on his exit from employment
but under no circumstances pension will be payable before the age
of 50 yrs.
A member who desires to draw monthly pension from a date earlier
than 58 yrs of age will be allowed to draw a reduced monthly
pension.the amount of pension in such a case shall be reduced
@3% upto 25/09/2008 and @4% w.e.f 26/09/2008 for every year the age falls short of 58 years. |
| |
| 4. SCHEME CERTIFICATE |
There are occasions when a member may leave employment and/or
may move from a covered establishment to an uncovered
establishment before he reaches the date of perannuations,he may
opt for a scheme certificate.The certificate will indicate his
pensionable salary and the amount of pension due on the date of
exit from employment. If the member is subsequently employed in a
covered establishment,his pensionable service in the scheme
certificate will be taken into account for working out his full
pensionable service. |
| 5. WIDOW PENSION |
| 5.1) Widow pension is of three categories:- |
| 1. |
Death of the member during service |
| 2. |
Death of member after commencement of monthly
member's pension |
| 3. |
Death of the member after leaving service but before
attaining the age of 58 yrs. |
|
5.2) Widow pension on death of the member during the service is equal to monthly member’s pension.
Widow pension is calculated on the principal as if the member had retired on the date of death. |
| 5.3) The essential conditions for grant of widow pension are as follows: |
| 5.3.a.)
The death of member occured while in service. |
| 5.3.b.)
The member has contributed atleast one month's contribution. |
| 5.3.c.)
The member has not attained the age of 58 yrs. |
| 5.3.d.)
The death of the member had taken place before the
commencement of monthly member's pension. |
Example 1:
Mr. X, a worker in an establishment, became member of the Employees’ Pension Scheme on 2nd Jan. 1996. He died in Feb. 1996 after a short illness. His wages at the time of death was Rs. 1500/- p.m. He left behind his widow aged 22 yrs. and a child aged 1 year. What will be the widow pension in this case?
It is confirmed that pension contribution for Mr. X, was paid by the employer for the month of Jan 1996.
Widow pension entitlement.
Pensionable service : One month
Pensionable salary : Rs. 1500/-
Either
(i) Pension according to the formula :
| Pensionable Salary X Pensionable Service |
|
1/12 X 1500 |
|
| ---------------------------------------------------------- |
eg |
------------------------ |
= Rs. 1.78 |
| 70 |
|
70 |
|
Or
(ii) Minimum Pension payable as per para 16 (2) (a) (i) of the scheme - Rs. 450/- p.m.
Or
(iii) The amount indicated in table `C' - Rs.718/- per month - whichever is more.
Since (iii) is more than (i) & (ii), Widow pension will be fixed at Rs.718/- per month for life
or
remarriage of the widow, whichever is earlier.
- For the child, 25% of the widow pension will be granted as monthly pension i.e. 25% of Rs.718 = Rs.179.50 or Rs.180/- p.m., till 25 years of age.
Example 2 : Mr. `Y' joined Employees Pension Scheme in January 1972. He died while in service, say, on 30 March 1998. He was drawing a salary of Rs.2,500/- p.m. from January'97 till death. He had attained the age of 48 years at the time of his death. He left behind the widow, two sons - one aged 16 years, one 7 years and one daughter aged 20 years. What would be the widow pension and children pension, payable?
(I) Mr. `Y' had done 26 years. 3 months of pensionable service at the time of his death. In calculation of eligible service for pension, fraction of three months will be ignored as per explanation to para 9(a) of the Scheme and thus eligible service will be taken as 26 years only. The average 12 months' salary at the time of his death was Rs.2,500/-. Hence member's monthly pension will be :
Either Pensionable Service X Pensionable Salary
70
i.e. (I) 26 x 2500 = Rs.928.57 or Rs.929/- p.m.
70
Or (ii) In terms of para 16(2)(a)(ii) - Rs.250/- p.m.
Or (iii) Table `C' - Rs.1087 - Whichever is more.
The amount at (iii) being more than (i) or (ii), the widow pension payable will be Rs.1087/- for life or remarriage of the widow, whichever is earlier. |
| 5.4. CHILDREN PENSION |
1) The member left behind three children one daughter aged 20
years, one son aged 16 years and the other son aged 7 years.To
start with, only the elder two, the daughter and the elder son will
get pension.
The daughter will get pension for 5 years by which time she will
be 25 years of age after 5 years of the vesting pension. After the
daughter ceases to be the beneficiary, the youngest child, then
aged 12 years, will start receiving pension till the age of 25
years. |
2) The amount of children pension will be at the rate of 25% of the
widow pension for each of the two children, viz.
25% +25% of Rs.1087 or Rs.272+Rs.272 for two children. |
| |
| 6. WIDOW PENSION AFTER COMMENCEMENT OF MONTHLY PENSION : |
6.1 In case of death of the member after vesting of pension, the amount of widow pension payable is @ 50% of the monthly member's pension subject to a minimum of Rs.250/- p.m. for example,
Mr.`Z', a pensioner, dies at the age of 66 years leaving behind his widow aged 62 years.
Mr.`Z' drawing pension @ Rs.1000/- p.m. The widow pension in this case will be Rs.500/- p.m.
6.2 In case the member leaves behind any child less than 25 years of age, children pension is payable for each equal to 25% of the widow pension subject to a minimum of Rs.115/- p.m. |
| 7. ORPHAN PENSION |
| 7.1) Commencement of Orphan Pension |
| |
Where a child is already motherless at the time of his father’s demise- the Orphan pension is due from the very beginning, that is, from the following day of his father’s death.
Where child’s mother expires later on (ie. during the course of payability of Children pension) – the Children pension will get converted into Orphan pension, from the following day of his mother’s demise |
|
| 7.2) Pension amount of Orphan pension |
| a. |
Rate of Pension:It is 75% of theamount of Widow's pension. |
| b. |
Minimum pension amount : Rs. 250/- p.m. |
|
| 8. NOMINEE PENSION |
| 8.1) Situations in which pension could become due to
employee's nominee : |
| a. |
The employee was a bachelor -implying that there
existed neither his widow nor any child to have pension after his
death,or |
| b. |
The employee was either a childless widower ,or his all children
were of age above 25 years ,and thereby,there being none in
his family to be eligible ,to have the pension after his death. |
|
| |
| 9. COMMUTATION OF PENSION: (Benefit withdrawn w.e.f.01.07.2008) |
10. OPTION FOR RETURN OF CAPITAL : (Benefit withdrawn w.e.f.01.07.2008) |
| |
Table A
(WITHDRAWAL BENEFIT)
(See Paragraph 14) |
No of full
years'
contribution paid |
Proportion
of pay
payable at cessation of membership |
No. of full years' contribution
paid |
Proportion of pay payable at cessation of
membership |
| 1 |
0.20 |
21 |
5.21 |
| 2 |
0.41 |
22 |
5.52 |
| 3 |
0.62 |
23 |
5.83 |
| 4 |
0.84 |
24 |
6.14 |
| 5 |
1.06 |
25 |
6.46 |
| 6 |
1.29 |
26 |
6.79 |
| 7 |
1.51 |
27 |
7.12 |
| 8 |
1.75 |
28 |
7.46 |
| 9 |
1.98 |
29 |
7.81 |
| 10 |
2.23 |
30 |
8.16 |
| 11 |
2.47 |
31 |
8.52 |
| 12 |
2.72 |
32 |
8.89 |
| 13 |
2.98 |
33 |
9.26 |
| 14 |
3.24 |
34 |
9.64 |
| 15 |
3.51 |
35 |
10.33 |
| 16 |
3.78 |
36 |
10.43 |
| 17 |
4.05 |
37 |
10.83 |
| 18 |
4.34 |
38 |
11.24 |
| 19 |
4.62 |
39 |
11.66 |
| 20 |
4.92 |
40 |
12.08 |
|
| |
Table B
(See Paragraph 14) |
| FACTOR FOR COMPUTATION OF PAST SERVICE BENEFIT UNDER THE CEASED FAMILY PENSION SCHEME FOR EXISTING MEMBERS ON EXIT FROM THE EMPLOYMENT |
| Years |
Factor
|
Years
|
Factor
|
| (1) |
(2) |
(1) |
(2) |
| Less than 1 |
1.039 |
Less than 18 |
3.845 |
| Less than 2 |
1.122 |
Less than 19 |
4.152 |
| Less than 3 |
1.212 |
Less than 20 |
4.485 |
| Less than 4 |
1.309 |
Less than 21 |
4.843 |
| Less than 5 |
1.413 |
Less than 22 |
5.231 |
| Less than 6 |
1.526 |
Less than 23 |
5.649 |
| Less than 7 |
1.649 |
Less than 24 |
6.101 |
| Less than 8 |
1.781 |
Less than 25 |
6.589 |
| Less than 9 |
1.923 |
Less than 26 |
7.117 |
| Less than 10 |
2.077 |
Less than 27 |
7.686 |
| Less than 11 |
2.243 |
Less than 28 |
8.301 |
| Less than 12 |
2.423 |
Less than 29 |
8.965 |
| Less than 13 |
2.616 |
Less than 30 |
9.682 |
| Less than 14 |
2.826 |
Less than 31 |
10.457 |
| Less than 15 |
3.052 |
Less than 32 |
11.294 |
| Less than 16 |
3.296 |
Less than 33 |
12.197 |
| Less than 17 |
3.560 |
Less than 34 |
13.173 |
|
| |
Table C |
EQUIVALENT WIDOW PENSION
(See Paragraph 16)
| Salary at day of death not more than |
Equivalent
widow pension |
Salary at day of death not more than |
Equivalent
widow pension |
Salary at day of death not more than |
Equivalent
widow pension |
Salary at day of death not more than |
Equivalent
widow pension |
| (1) |
(2) |
(1) |
(2) |
(1) |
(2) |
(1) |
(2) |
| Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
| Upto 300 |
250 |
1900 |
862 |
3500 |
1481 |
5100 |
1911 |
| 350 |
327 |
1950 |
880 |
3550 |
1501 |
5150 |
1916 |
| 400 |
343 |
2000 |
898 |
3600 |
1521 |
5200 |
1921 |
| 450 |
359 |
2050 |
916 |
3650 |
1541 |
5250 |
1926 |
| 500 |
375 |
2100 |
935 |
3700 |
1561 |
5300 |
1931 |
| 550 |
391 |
2150 |
954 |
3750 |
1581 |
5350 |
1936 |
| 600 |
408 |
2200 |
973 |
3800 |
1601 |
5400 |
1941 |
| 650 |
425 |
2250 |
992 |
3850 |
1621 |
5450 |
1946 |
| 700 |
442 |
2300 |
1011 |
3900 |
1641 |
5500 |
1951 |
| 750 |
459 |
2350 |
1030 |
3950 |
1661 |
5550 |
1956 |
| 800 |
476 |
2400 |
1049 |
4000 |
1681 |
5600 |
1961 |
| 850 |
493 |
2450 |
1068 |
4050 |
1701 |
5650 |
1966 |
| 900 |
510 |
2500 |
1087 |
4100 |
1721 |
5700 |
1971 |
| 950 |
527 |
2550 |
1106 |
4150 |
1741 |
5750 |
1976 |
| 1000 |
544 |
2600 |
1125 |
4200 |
1751 |
5800 |
1981 |
| 1050 |
561 |
2650 |
1144 |
4250 |
1761 |
5850 |
1986 |
| 1100 |
578 |
2700 |
1163 |
4300 |
1771 |
5900 |
1991 |
| 1150 |
595 |
2750 |
1182 |
4350 |
1781 |
5950 |
1996 |
| 1200 |
612 |
2800 |
1201 |
4400 |
1791 |
6000 |
2001 |
| 1250 |
629 |
2850 |
1221 |
4450 |
1801 |
6050 |
2006 |
| 1300 |
646 |
2900 |
1241 |
4500 |
1811 |
6100 |
2011 |
| 1350 |
664 |
2950 |
1261 |
4550 |
1821 |
6150 |
2016 |
| 1400 |
682 |
3000 |
1281 |
4600 |
1831 |
6200 |
2021 |
| 1450 |
700 |
3050 |
1301 |
4650 |
1841 |
6250 |
2026 |
| 1500 |
718 |
3100 |
1321 |
4700 |
1851 |
6300 |
2031 |
| 1550 |
736 |
3150 |
1341 |
4750 |
1861 |
6350 |
2036 |
| 1600 |
754 |
3200 |
1361 |
4800 |
1871 |
6400 |
2041 |
| 1650 |
772 |
3250 |
1381 |
4850 |
1881 |
6450 |
1946 |
| 1700 |
797 |
3300 |
1401 |
4900 |
1891 |
6500 |
2051 |
| 1750 |
808 |
3350 |
1421 |
4950 |
1896 |
|
|
| 1800 |
826 |
3400 |
1441 |
5000 |
1901 |
|
|
| 1850 |
844 |
3450 |
1461 |
5050 |
1906 |
|
|
|
| RETURN OF CONTRIBUTION ON EXIT FROM THE EMPLOYMENT |
| Table – D |
| Year of service |
Proportion of wages at exit |
Year of service |
Proportion of wages at exit |
| 1 |
1.02 |
6 |
6.07 |
| 2 |
1.99 |
7 |
7.13 |
| 3 |
2.98 |
8 |
8.22 |
| 4 |
3.99 |
9 |
9.33 |
| 5 |
5.02 |
|
|
|
