pf calculation, pension formula is going to change, just waiting for EPFO report – employees provident fund organisation: proposal to change formula for pension under eps 95
[ad_1]
It is worth mentioning that if EPFO changes the formula for pension, then it will surely determine the monthly pension of all, including those opting for higher pension, less than the existing formula. This can be understood with an example. Let us assume that the average salary for the last 60 months of the person opting for higher pension is Rs.80,000 and his pensionable service is 32 years. In this case, his pension under the existing formula (80,000 times 32/70) will be Rs.36,571. On the other hand, when the average of salary during the entire pensionable service is taken, then the determination of monthly pension will be less because the salary (basic salary and dearness allowance) is less in the initial days of the job.
It is noteworthy that in November last year, the Supreme Court had asked the government to give four months time to the subscribers to opt for the higher pension. EPFO has provided online facility for subscribers to fill joint option form with employers to opt for higher pension. The deadline for this was earlier May 3, 2023, which has been extended to June 26, 2023. At present, EPFO subscribers contribute a fixed limit of Rs 15,000 per month for pension, while their actual salary is much more than this. With the option of higher pension, they will be able to get higher monthly pension.
Employees contribute 12 per cent to the social security scheme of EPFO. At the same time, out of 12 percent contribution of the employer, 8.33 percent goes to EPS. The remaining 3.67 percent goes to the Employees’ Provident Fund. The government contributes 1.16 per cent as subsidy to the Employees’ Pension Scheme on a limit of Rs 15,000 basic salary. When asked about the need to change the formula, the source said, “It is actually believed that giving more pension for a long time will lead to financial burden. That is why a new formula is being considered.
Responding to a question on the corpus of Rs 6.89 lakh crore lying in the pension fund, the source said that this money does not belong only to the pensioners but to all the shareholders associated with the EPFO and the Employees’ Fund Organization has to take care of all. It is noteworthy that according to the 2021-22 report of EPFO, Rs 6,89,211 crore is deposited in the pension fund. EPFO received an interest of Rs 50,614 crore in 2021-22 on the EPS fund.
[ad_2]
Source link
