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    LABOUR LAWS

1. DEFINITION
Employees’ Pension Scheme is Pension Scheme for survivors, old aged and disabled persons. The earlier Family Pension Scheme, 1971 offered only one type of benefit, namely, survivor’s benefit, 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 :—
     1. Survivor Pension : If death occurs during service period.
     2. Old Age Pension : Pension or Superannuation.
     3. Permanent Disability : In the event of member suffering
Pension permanent disability while in service.


2. CHARACTERISTICS
In the scheme three scales of pensioners 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 exits from employment after four years of service his wage on exit is Rs. 4,000, (Return of contribution will be calculated as Rs. 4,000 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 as Rs. 4,000/- pension payable to him will be Rs. 1,029/-
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 members 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 the 16th November, 1995 or a member who has attained the age of 48 years but is less than 53 years on 16th November, 1995, member who has attained the age of 53 years or more on the 16th November, 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 the 16th Nov. 1995 or Rs. 635/- whichever is more plus past service benefits as under :-

Sr. No.
Years Of Past Service

The Past Service Benefits payable on completion of
58 No. years of age on 16.11.95

  
  Salary up to Rs. 2,500/- p.m. Salary more than Rs. 2,500/p.m.
1.
Up to 11yrs.
Rs.80/-
Rs.85/-
2.
More than 11 yrs. but up to 15 yrs.
Rs.95/-
Rs.105/-
3.
More than 15 yrs.
Rs.120/-
Rs.135/-
4.
Beyond 20 yrs
Rs.150/-
Rs.170/-

Subject to a minimum of Rs. 800/- per month provided the past service 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 of Rs. 450/- per month.

2.4.b Member has attained the age of 48 years but is less than 53 years on 16.11.1995

Pension as determined by the above mentioned formula; i.e.

Pensionable Salary X Pensionable Service
                             70

for the period of service rendered form 16.11.1995 or Rs. 438/- per month whichever is more plus past service as laid down in Para 12(3) subject to a minimum of Rs. 600/- per month, 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 a minimum of Rs. 325/- p.m.

2.4.c Member has attained the age of 53 years or more on 16.11.1995

Pension as determined by the above mentioned formula i.e.

Pensionable Salary X Pensionable Service
                             70

for the period of service rendered form 16.11.1995 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 a minimum of Rs. 500/- p.m. (both together) in case past service period is 24 years. If it is less than 24 years pension payable and the past service benefit shall be proportionately lesser subject to a minimum of Rs. 265/- p.m.


3. EARLY PENSION ON CESSATION OF EMPLOYMENT

Old age pension on account of superannuation/retirement is normally payable on attaining the age of 58 years. However, member can opt for taking earlier than 58 years on his exit from employment but under no circumstances pension will be payable before the age of 50 years. A member who desires to draw monthly pension from a date earlier than 58 years of age will be allowed to draw a monthly reduced pension. The amount of pension in such a case shall be reduced at the rate of 3% 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 superannuation, 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 — one of death of the member during service, second on the death of the member after leaving service but before attaining the age of 58 years and the third in case of death of the member after commencement of payment of monthly members pension.
5.2
Widow pension on death of the member during the service is equal to monthly members pension.
5.3
The essential conditions for grant of widow pension are as follows:-
5.3a.
The death of the member occurred while in service.
5.3b.
The member has contributed at least one month’s contribution.
5.3c.
The member had not attained the age of 58 years.
5.3.d.
The death of the member had taken place before the commencement of monthly members pension.

Example 1: Mr. ‘X’, a worker in an establishment, became member of the Employees Pension Scheme on 2nd January, 1996. He died in February 1996 after a short illness. His wages at the time of death were Rs. 1,500/- p.m. He left behind his widow aged 22 years and a child aged 1 year What will be the widows pension in this case?
It is confirmed that pension contribution for Mr. ‘X’ was paid by the employer for the month of January 1996.
Widows pension entitlement.
             (i) Pensionable service One month Pensionable salary Rs. 1500/-

Either   (ii) Pension according to the formula :
                        Pensionable Service X Pensionable Salary   i.e. 1 X 1500
                                                       70                                     12       70
                                                                                                    = 1.78

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.
             (iv) 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 Family Pension Scheme in
January 1972. He died while in service, say, on 30 March, 1998. He was drawing a salary of Rs. 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 year 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 term of para 16(2)(a)(ii)—Rs. 250/- p.m.

5.4
Children Pension.
5.4-i.

The member left behind three children one daughter aged 20 years, one son aged 16 years’ and the other son age 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 for age after 5 years of the vesting of pension. After the daughter ceases to be the beneficiary, the youngest child, then age 12 years, will start receiving pension till the age of 25 years.

5.4-ii.
The amount of children pension will be @ 25% of widow pension for each of the two children. Viz. 25%+25% of Rs.1,087 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 is payable @ 50% of the monthly member’s pension subject of 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. COMMUTATION OF PENSION

(This facility is available three years after the commencement of the scheme, i.e. w.e.f. 16th November 1995.)
The member may commute one-third of his monthly pension. The commuted value shall be 100 times the monthly pension. Balance Pension shall be paid on monthly basis. He may also opt for return capital u/p 13 of the EPS of the balance pension payable.


8. OPTION FOR RETURN OF CAPITAL

The member may opt to draw revised pension and avail of return of capital under any one of the three alternatives as per the table shown u/p 13 of the scheme.

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