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.
