EPF India Higher Pension with Employee Pension Scheme (EPS), Conditions, Formula, Calculation at Various Stages for Retirement

Find the complete details on EPF Higher Pension about who are eligible for higher EPS, What will happen if EPF amount already withdrawn, How to apply EPF higher pension, What is formula and the calculation of higher pension in various stages, Terms and conditions, and the applicability of enhanced pension of EPFO, Differences between Current and New Higher Pension of EPFO…

As per the details of G. Acheswarao SNEA BSNL, we present the following data is provided for reference on EPF Higher Pension to know how it works and how new higher EPS will help for a happy retirement life, and this can be the same of all EPF members who are recruited in BSNL, BHEL, SAIL, ONGC, BEL, and other PSU’s / Private organizations, but members of EPFO.

What is EPF Higher Pension

  • As per Hon’ble Supreme Court of India order in civil Appeal No(s) 10013-10014 of 2016 arising out of SLP No 33032-33033 of 2015, all the members of Employees Pension Scheme (EPS) 95 which is a social security scheme offered by Employees Provident Fund Organisation (EPFO) will benefit of the actual salary in the pension exceeding wage limit of Rs. 15000 per month, which would get benefit by contributing 8.33% of actual salary instead of ceiling salary.
EPF Higher Pension

Who are eligible for EPF Higher Pension

All the employees who joined as a member in Employees Provident Fund Organisation (EPFO) before 1st September 2014 are eligible for EPF Higher Pension.

An EPF member or employee withdraw EPF amount already is eligible for Higher Pension

If the employee / member of EPFO ready to repay the balance amount under Employees Pension Scheme (EPS) is eligible for EPF higher pension

Terms and Conditions for EPS of EPFO

  • An employee must have been in the service for at least 10 years.
  • One can get the pension after the age of 58 only and the reduced pension of EPFO’s EPS can be withdrawn after the age of 50.
  • An EPF member can also defer your pension till the age of 60, and If you opt for deferment, the pension would increase by 4% for every deferred.
  • The Pension (EPS) is given to the family after the untimely death of employee, and also an employee can get a pension if s/he gets totally incapacitated.

How to apply for EPF Higher Pension Option

A joint declaration option form of member / Employee and Employer has to submit to concerned Regional EPF office to join in EPF higher pension.

Current EPS of EPFO

  • Pension contribution is 8.33% of ceiling salary
    • Ex: 8.33% of Rs. 15000 = Rs. 1250

Higher EPS of EPFO

  • Pension contribution is 8.33% on ACTUAL SALARY

In both the cases the pension contribution is from 12% of employer contribution only.

Amount Deposited in EPFO Employees Pension Scheme

  • Current EPS
    • The amount deposited in EPF account is 12% of salary from employee + 12% of salary by employer – Rs. 1250 (8.33% of 15000)
  • Higher EPS
    • 12% salary of Employee contribution + 3.37% salary of employee contribution by employer + 8.33% salary of employee contributed by Employer is deposited in EPS

The amount deposited in the EPF account is more in current EPS option, but now when opts for higher pension, the amount deposited in the EPS account is more in Higher EPS option.

There is interest on the deposited amount in the EPF, but there is no interest on the deposited amount in the Employees Pension Scheme.

EPF Higher Pension Formula

Current EPS

  • 15000 (Ceiling Salary) * Pensionable Salary / 70
    • Ex:- 15000*35/70 = 7500

Higher EPS

  • Average of 60 months salary * Pensionable service / 70
  • Ex:- 100000*35/70 = 50000

Let us check with an example for EPF Higher Pension by assuming Basic and 100% DA merged in 3rd PRC and 4th PRC of PSU for an employee working in 2017 and retires in December 2035.

Case Study of 2017

Case Study of 2035

Particulars Current EPS Higher EPS
Pensionable Salary 15000 242450 (Average Salary of 60 Months)
Suppose in above example employee serves for 33 years (i.e 2 years extra if service is more than 20 years) 35 35
Pension = Pensionable Salary * Years of Service) / 70 15000*35/70 = 7500 242450*35/70 = 121225
EPF Fund Value under both options on simple interest at 8% 24745280 16880133
Differential Amount in Current EP S 7865147

If your life expectancy is around 8 years after retirement, you are at break even as per above sample calculation, but life is uncertain, and 3rd PRC / 4th PRC has not been taken into consideration and in 2017, 2027, 100% DA has been merged with Basic without any fitment to be in safer side, where you can simulate after changing the figures for EPS.

Know Your Reduced Pension of EPFO

Age Factors to Multiply
50 0.7837
51 0.808
52 0.833
53 0.8587
54 0.8853
55 0.9127
56 0.9409
57 0.97
58 1

Enhanced Pension After 58 under EPS

In the reduced pension formula, the pension decreases by 4% for every year. Similarly, you would get 4% more pension for every extra year. However, you can get only two such years as this benefit is not available after the age of 60.

If employee have VRS / CRS before 50 years of age

There is no pension till attending the age of 50 years, Pension is as per given above reduced table If employee serviced for 15 years with Avg 60 months salary is Rs 40000

Current EPS

  • Pension= 15000*no of years service/70
    • Ex : 15000*15/70 = 3214

Higher EPS

  • Pension= Avg 60 months salary *no of years service/70
    • Ex : 40000*15/70 = 8571

Difference Pension when opted for Higher Pension = 8571-3214 = 5357

If employee have VRS / CRS before 50 years of age but serviced 20 Years

In this case also, there is no pension till attending the age of 50 years in both the cases, Pension is as per given above reduced table, If employee serviced for 20 years with average 60 months salary is Rs 100000

Current EPS

  • Pension= 15000*no of years service/70
    • Ex : 15000*22/70 = 4714

Higher EPS

  • Pension= Avg 60 months salary *no of years service/70
    • Ex : 100000*22/70 = 31,428

At the age of 50 years, Pension = 31428 * 78 / 100 = 24513

Difference Pension when opted for Higher Pension = 24513 – 3676 = 20837

Particulars Current EPS Higher EPS
Pensionable Salary 15000 81834 (Average Salary of 60 Months)
Suppose in above example employee serves for 22 years (i.e 2 years extra if service is more than 20 years) 22 22
Pension = Pensionable Salary * Years of Service) / 70 15000*22/70 = 4714 81834*22/70 = 25710
EPF Fund Value under both options on simple interest at 8% 6384946 4535834
Differential Amount in Current EPS 1849113

EPFO EPS FAMILY PENSION

Assumed if employee serviced for 15 years with average 60 months salary is Rs. 40000

Current EPS

  • If member death in service, then the Family Pension = (15000 * 20 of years of service / 70) /2
    • Ex: (15000 * 15/70) / 2 = 1607.
  • If Member death after retirement
    • Ex: (15000 * 35/70) / 2 = 3750.

If Opted for Higher Employees Pension Scheme

  • If member death in service, then the Family Pension = (15000 * 20 of years of service / 70) /2
    • Ex: (40000 * 15/70) / 2 = 4285.
  • If Member death after retirement
    • As per above case study, Ex: (40000 * 35/70) / 2 = 60612.

Difference in Case1 : 4285 – 1607 = 2678, but Case 2: 60612 – 3750 = 56862

Suppose at present 10 lakh by employee and 10 lakh by employer have been deposited in EPF in last 15 years

  • In current EPS pension contribution deposited is = 6500*8.33% * no of Months * no of years
    • Ex: 6500*8.33% * 12 * 12 + 15000 * 8.33% * 12 * 3 = 123048

Amount deposited in EPF account =1000000+(1000000-123048)=1876952

If we opt to Higher EPS

As per above case study

  • Amount deposited in EPS account = 431051
  • Amount deposited in EPF account =1000000+(1000000-431051) = 1568949
  • Arrear to be transferred from employee EPF fund to EPS fund : 431051-123048=308003
  • Note : This is without considering interest
  • If there are any surviving children of the deceased member, falling within a definition of family, they shall be entitled to a monthly children pension in addition to the monthly widow/widower pension.
  • Monthly children pension for each child shall be equal to 25 per cent of the amount admissible to the widow/widower of the deceased member
  • Monthly children pension shall be payable until the child attains the age of 25 Monthly children pension shall be payable until the child attains the age of 25years
  • The monthly children pension shall be admissible to maximum of two children.

Differences for Current EPS and Higher EPS

Particulars Current EPS Higher EPS
If BSNL / Any PSU continue to give us regular increment and IDA our (employee) retirement Low Pension Very High Pension
If employer not able to give regular increments and IDA till retirement or in last 5 years of our service or VRS / CRS EPF Amount is more and EPS amount is Low
Access EPF amount would help at the time of Retirement / VRS / CRS
Pension will be low as per last 5 years Wages and EPF amount will also be lower than current EPS
If Government imposes taxes on EPF amount withdraw at the time of retirement More Tax to be paid on EPF amount Less Tax to be paid
If less EPF Interest Rates Less Pension and Less Interest will be heavy loss in EPF Amount Higher Pension every month gives comfortable fund in our hand.
If Employee and Spouse are alive till 75 years of age Low Pension will effect for daily life Very High Pension will give Happy Life
If employee and Spouse are alive till 65 years of age High accumulated EPF amount will help next generation Next generation and our children above age 25 years will not get any Pension, We have invested lakhs of rupees in 35 years of service, but not enjoyed pension for long time
Any emergency Requirement Higher EPF amount could be withdrawn at the time of Emergency Not Possible

If our JOB in any organization (Govt PSU / Private) will continue till 58 years, then the EPF higher pension option will provide higher pension for every member of EPFO, and there is no need to plan anything else for retirement and every employee can enjoy their own current salary in present time without any worry for future retirement.

In current Employee Pension Scheme of EPFO, the option need some other retirement planning like NPS from now onwards to help the existing members too, and if we think with positive attitude, HIGHER EPS of EPFO’s is very good option for every employee to live happily on retirement.

7 thoughts on “EPF India Higher Pension with Employee Pension Scheme (EPS), Conditions, Formula, Calculation at Various Stages for Retirement”

  1. Sir je me best Brice wal mart me kam karta tha lekin ab mene baha se chod diya 06.octubar 2020ko lekin mera pf jab me apply kar raha tha to ku ki me phehle dusri company me kaam karta tha to us ki I’d utha tha tha to mene mere pf transfer kar diya lekin best price wal mart me settle bata raha he or phehle me prime one company me kaam karta tha us me pese nahi aaye he un no. 100742823230plz aap ese clear kara dijiye na please mo no.8357952611.9165609507

    Reply
  2. Member ID सदस्य का नाम
    Member Name पिता/पति का नाम
    Father/Husband Name जन्म तिथि
    Date Of Birth संस्था मे शामिल होने की तिथि
    Date of Joining
    GRVSP00177010000000012 N RANGHANADHA RAO, BALAKRISHNA MURTHY (Father), 04-AUG-1960, 1987-05-08 00:00:00.0
    संस्थान कोड संख्या
    Establishment ID संस्थान का नाम
    Establishment Name सम्बंधित कार्यालय
    Concerned with
    GRVSP0017701000 A P STATE HOUSING CORPORATION LTD, (SRO)VISHAKAPATNAM
    अंतिम शेष (₹) Closing Balance(Rs.)
    कर्मचारी अंश/ Employee Share:1252951, नियोक्ता अंश/ Employer Share 1992301 कुल/ Total:3245252
    Request to calculate my pension at the age of 58 years – ie. 31.8.2018

    Reply

    Reply
  3. Dear Sir,
    I just wanted to know, I have worked for two different company, the first company its for 13.years and I have received pension certificate and second company for 12 years I have two pension certificate. now I am 54 years how to accumulate this two pension certificate in one or do I have to apply it separately, Kindly request your suggestion please.

    Reply
  4. M.A.PANDURANGAN
    Retired on 30/06/2015
    Getting Pension RS .2398 per month from 01/07/2015 onwards.
    Join duty 28/01/1985 and retired on 30/06/2015 Service period 30 years and 5 months 4days.
    Opted for Hire pension now, please calculate differential amount and interest payable to EPFO

    Reply
  5. I retired on 31.07.1959 at the age of 60 and I have not drawn a single paise from EPF, I joined service during 1983 and continued as such till the date of retirement as mentioned above, While retirement I was drawing a salary of Rs.70000, Please say whether higher EPS is beneficial for me or not, If yes, what more shall I contribute to EPS for higher pension, Please advise.

    Reply
  6. Member ID सदस्य का नाम
    Member Name पिता/पति का नाम
    Father/Husband Name जन्म तिथि
    Date Of Birth संस्था मे शामिल होने की तिथि
    Date of Joining
    GRVSP00177010000000012 N RANGHANADHA RAO, BALAKRISHNA MURTHY (Father), 04-AUG-1960, 1987-05-08 00:00:00.0
    संस्थान कोड संख्या
    Establishment ID संस्थान का नाम
    Establishment Name सम्बंधित कार्यालय
    Concerned with
    GRVSP0017701000 A P STATE HOUSING CORPORATION LTD, (SRO)VISHAKAPATNAM
    अंतिम शेष (₹) Closing Balance(Rs.)
    कर्मचारी अंश/ Employee Share:1252951, नियोक्ता अंश/ Employer Share 1992301 कुल/ Total:3245252
    Request to calculate my pension at the age of 58 years – ie. 31.8.2018

    Reply

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