Grossly inadequate Pension under EPS

Grossly inadequate Pension under EPS
Pension is a measure of security for old age, inability, and death of the breadwinner. But how the pension of Rs. 5914 after serving 26+2 years of service will help an old person to meet even the minimum of his/her needs is anybody's guess. Such a low amount in this age of high inflation is like heaping a cruel joke on the honour and dignity of the pensioner.

he Pension under the EPF Act is grossly inadequate. Let us first know some basic facts. If an employee has been regularly contributing from 1996 till date towards pension, what will be the amount of pension available to him? It can be understood by the following example.

From 1996 till date, the member’s service shall be 26 years – taking it as pensionable service + 2 years’ grace = 28 years.
Pensionable salary as 15000 – average for last 60 months
Department’s system management calculates it as under-
Rs.15000 X 60 = Rs. 9,00,000 / 1826 days = 492.88 X 30 = Rs. 14786 as average pay
1826 days arrived – Nov. 2017 to Oct. 2022 = 1825 + 1 day of Leap-year = 1826
After arriving one day’s pay is multiplied by 30 for arriving one month’s average pay.
So, by using these 2 elements in the formula –
Rs. 14786 X 28 / 70 = Rs. 5914 will be a pension per month.
Provided by Mr. R.N. Bairwa

According to section 11 of the Employees’ Pension...

To Read The Full Story, Subscribe To Business Manager

H.L. Kumar

is Advocate, Supreme Court of India, New Delhi. He has also been former Law Teacher in University of Delhi.

View all posts

Add comment

Your email address will not be published. Required fields are marked *

Author

H.L. Kumar

is Advocate, Supreme Court of India, New Delhi. He has also been former Law Teacher in University of Delhi.

January 2023

Submit Your Article

Would you like to share your views? submit your Aricle by clicking on the button below. Submit your Article
error: Content is protected !!