Higher Pension on actual salary under Employees Pension Scheme 1995

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To,

The Central PF Commissioner EPFO, Head Office

New Delhi.

Sub: Higher Pension on actual salary under Employees Pension Scheme 1995.

Ref:

1. Supreme Court Judgement dated 04.11.2022

2. The instructions vide circular dated 01.06.2023 bearing No. Pension/SC/Higher Pension/2022/1357 by Regional PF Commissioner-I (Pension).

Namste Ji

I wish to place before you the most important issue of higher pension on actual salary under Employees Pension Scheme 1995. As you are aware the Honorable Supreme Court of India has given a landmark judgement allowing the employees to exercise joint option those who have retired after

01.09.2014. The time limit for submitting the joint options by the members was extended with

the representation of all concerned.

I wish to draw your kind attention to the instructions circulated on 01.06.2023 for the computation of Pension which is as follows:

1) Cases found eligible for Pension on Higher wages where date of commencement of pension is prior to 01.09.2014: Pension shall be calculated based on average monthly pay drawn during contributory period of service in the span of 12 months preceding the date of exit, from the membership of the pension fund.

2) Cases found eligible for pension on higher wages where date of commencement of pension is post 01.09.2014: Pension shall be calculated based on average monthly pay drawn during contributory period of service in the span of 60 months preceding the date of exit from the membership of the pension fund.

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The being the situation on 27.07.2023 regional Provident Commissioner -2 (Accounts and Pension), Regional Office, Rourkela had issued a decision come demand letter to Shri. Srikanth Kumar Sahu indicating a new methodology for computation of Pension which is as follows:

(Ref.: Para 12 of Employees’ Pension scheme, 1995)

> Part 1: (pension for the period of service between 16.11.1995 to 31.08.2014)

+ (plus)

A: Period of Service (in days) w.e.f. 16.11.1995 to 31.08.2014 – (Minus)

730 days (if eligible for weightage of 2 years)

Non-contributory period, if any (in days)

B: Average of the wages of 12 months wages preceding 01.09.2014 in Rupees. (Wages details are attached hereto in page 5 to 12 of this decision/letter for the purpose of calculation of Part 1 of Pension)

Pension amount for Part 1 in Rupees = (A*B) 365*70)

(No rounding off at this stage)

Part 2: (Pension for the period of service w.e.f. 01.09.2014 till the date of exit from EPS’95) X: Period of service (in days) w.e.f. 01.09.2014 till date of exit from Pension Fund -(Minus)

Non-contributory period if any (in days)

Y: Average of the wages of 60 months preceding the date of exit of pension fund in Rupees. (Wages details are attached hereto in page 5 to 12 of this decision /letter for the purpose of calculation of Part 2 of pension)

Pension amount for Part 2 in Rupees = (XY)/365*70) (No rounding off at this stage)

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1/3/1

Actual Service benefit (for service after 15/11/1995) under Para 12 of the Employees Pension Scheme. 1995.

Total of Part 1 and Part 2 above (rounded off to neared number in Rupees).

Total Pension: Actual Service benefit as above

+ (Plus)

Past Service Benefit (for the period of contributory service prior to 16/11/1995, if exist) which will not change under either circumstance, i.e. with exercising the option or without exercising the option for pension on wages higher than wage ceiling after 15/11/1995.

PS: The values of ‘B’ and ‘Y’ above will be calculated as the average of actual wages (not capped to the wage ceiling). The values of ‘A’ and ‘X’ will not change when compared with those of a similar cases with the option to pay contributions on monthly wages capped at the wage Ceiling as applicable from time to time.

The following example illustrates the loss in pension:

An employee joining HAL on 20.11.1983 and date of superannuation is 29.01.2022 (completed 58 years of age) who completes past service of 12 years 4 days i.e. 12 years and drawing a salary of more than Rs. 2500 Per month as on 16.11.1995 and actual service of 26 years two months 13 days (i.e. 26 years). Member is also eligible for bonus of 2 years since the actual service is more than 20 years. The member will receive a pension of Rs. 807 per month for the past service up to 16.11.1995. The details of arriving as per the formula is as below with wage ceilings:

A) Pensionable Service in wage ceiling of Rs. 6500/- in days from 16.11.1995 to 30.08.2014 is 6856 days + 2 years (730) Bonus. Total No. of days 7856.

Monthly member pension from 16.11.1995 to 30.08.2014 as below:

Rs.6500 x 7586 days

=135093.

365

Pension as per formula = 135093/70 Rs. 1930/- per month.

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B) Pensionable Service in wage ceiling of Rs. 15000/- in days from 01.09.2014 to 28.01.2022 is 2707 days.

Total No. of days 2707.

Monthly member pension from 01.09.2014 to 29.01.2022 as below:

Rs.15000 x 2707 days

-=111247

365

Pension as per formula = 111247 / 70 = Rs. 1589/- per month.

Total Pension from 16.11.1995 to 29.01.2022 = A + B

i.e. Rs. 1930+ Rs. 1589 Rs. 3519/- pension per month. Pension as per weighted average is Rs. 3519/- per month.

Total Monthly member superannuation pension including past service is Rs. 3519 + Rs. 807 Rs. 4326/-.

As per the formula of Rourkela Part-A pension is as follows:

Month

Sep-13

Oct-131

Nov-13

43312

43312

43312

Dec-13

Jan-14

42012

52846

Feb-14

Mar-14

49949

49949

April-14

49398

49398

May-14 June-14

49398

July-14

Aug-14

50159

50159

Total:

Actual Wages drawn

573204

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Average Salary: 47767.00

Pensionable Service: 6856+ Bonus of 730 = 7586 days

> Part – A Pension: Average Salary of 12 months preceding to 01.09.2014 X Pensionable service in days

70 x 365 days

= 47767 x 7586

70 x 365 days

=14182

Month

Month

Actual Wages Drawn

Month

85858

85858

77174

95124

86816

Actual Wages

Drawn

117235 115676

118794

116391

116762

116762

117489

117669

112418

119992

116534

86816

88447

Jan-21 Feb-21

Mar-21

April-21

May-21

June-21 July-21

Aug-21 Sep-21

Oct-21

Nov-21

Dec-21

Total:

88376 88327

Actual Wages

Drawn

70965 74511

76914

73660

61779

83086

74029

76753

74289

73652

76106

78560

8,94,304

79284

79284

79198 77769

79339 79339

78486

79612

76960

82295

79069

125512

Jan-17 Feb-17

Mar-17

April-17

May-17

June-17

July-17

Aug-17 Sep-17

Oct-17

Nov-17

Dec-17

Total:

Jan-18

Feb-18

Mar-18

April-18

May-18 June-18

July-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18 Total:

14,11,234

Jan-19 Feb-19

Mar-19

April-19

May-19

June-19.

July-19

Aug-19 Sep-19

Oct-19 Nov-19

Dec-19

Total:

Jan-20

Feb-20

Mar-20

April-20

May-20 June-20

July-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

Total:

62564

89969

89650

10,24,979

258043

107744

107085 105503

112847

109190

108771

336128

108373

111305

104959

108626

16,78,571

82906 9,53,541

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Average Salary: 99377.00

▸ Pensionable Service: 2707 days

Part – A Pension: Average Salary of 60 months preceding to date of exit X Pensionable service in days

70 x 365 days

= 99377 x 2707

70 x 365 days

=10529

Total Pension: Part-A + Part-B + Past service Pension +P

14182 + 10529 +807 = Rs. 25518 per month

Pension as notified by Regional Provident Fund Commissioner, New Delhi dated 01.06.2023 is as follows:

> Pension: Average Salary of 60 months preceding to date of exit X

Pensionable service in days

70 x 365 days

= 99377 x 10293(6856+2707+730)

70 x 365 days

=40034

Past Service Benefit of Rs. 807/-

Total Pension 40034+807=40842/-

Total Dues to be paid by the member as per refund calculator is if paid by 30.09.2023 is Rs.17,42,056

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Difference in Pension as per Circular dated 01.06.2023 and as per RPFC Rourkela is Rs. 40842-25518 Rs. 15323,

This is a clear injustice to the members. I seek your immediate intervention and necessary instructions may please be given to all the RPFCs so as to calculate the pension as per circular dated 01.06.2023.

Total Dues to be paid by the member as per refund calculator is if paid by 30.09.2023 is Rs.17,42,056.00

With regards.

Member-CBT

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