🔴3 Reasons You will get less PF pension | REAL Pension Calculation Formula | LLA EPS Ep#2 - YouTube

Hello friends, I usually make 20 rounds of this ground

Do too much hard work by assuming that at least10 calories would burn in at least one round

Therefore in 20 rounds, it would be 200. But when I reach home full of sweat

Notice that only 120 calories got burnt, why?

Because there is a very weird rule. in 1st 10 rounds you will have burnt only 2 calories per round

Therefore in 10 rounds, you will have burnt 20 calories and remaining 10 rounds

you will have burnt 10 calories per round equals 120

It's a very strange rule and its thing also happens with " Employee Pension Scheme "

recently I applied for my father's pension

their pensionable salary was eleven thousand one hundred and eighty-seven

total service was of 19 years

and by this formula which you will be able to see in many Youtubers and blogs

Adding values in this formula our pension comes out to be 3100 rs

but their pension comes out to be 2100 rs

Here comes the rule of " PRO RATA " and very few talk about it in their videos

So friends in this episode of LLA EPS -2 we are going to talk on

How to calculate pension what its formula, which you see in most of the news articles and blog

the calculation, why your value won't come even somewhat near that value

Then we will see an actual pension calculation For example, which I recently applied for my father's pension

How to calculate its pension by using new calculation. You will be able to see it dam accurate

At the end of the video, I am going to give to a very awesome bonus tip

I was also amazed after knowing that, by that bonus tips as a pensionable you will have a good profit

or loss too [ 50-50 chances ]

So friend my name is " Rishabh Jain " I am your Labour Law Decoder

You are watching LABOUR LAW ADVISOR. Indian's that channel, that helps employee

to make them aware and to do theirs right. Before we go ahead if you haven't

Subscribed our channel then do it [ politely talking ] press the bell icon

because in this series EP-3 is also coming soon. And you don't wish to miss it

[ intro music ]

As you knew Employee Pension Scheme ( EPS ) is one of the three scheme

The other two are the Employee Provident Fund Scheme (EFS) and Employee Deposit Linked Insurance Scheme (EDLI)

If in this you have served more than " 9 years 6 months " then you become eligible for pension

And whenever you turn to 58 and in some conditions before it then you can apply for pension

EPS scheme not only gives pension to the member . It also gives pension to its dependence after his/her death

in fact there is an option for disablement too

But in today's video, we are focusing upon member pension, through which most of us are connected

and about widow pension, child pension, disable- -ment pension we are going to talk about in EP-3

Any employees becoming a member of E.P.S. after 1995

their pension calculation is calculated on the basis of EPS paragraph 12

So in paragraph 12, it's written that

IN THE CASE OF A NEW ENTRANT, THE AMOUNT OF MONTHLY SUPERANNUATION PENSION OR

EARLY PENSION, AS THE EASE MAY BE, SHALL BE COMPUTED IN ACCORDANCE WITH THE FOLLOWING

FACTOR NAMELY:- MONTHLY MEMBER'S PENSION EQUALS TO

PENSIONABLE SALARY MULTIPLIED BY PENSIONABLE SERVICE DIVIDED BY 70

And most people know about this formula

But, in this formula below there is a line that messes up whole the game

The line is " the members monthly the pension shall be determined on a PRO-RATA BASIS

" for pensionable service upto the FIRST DAY OF SEPTEMBER, 2014. At the maximum

At maximum Pensionable salary of Six thousand and Five hundred rupees

and for the period thereafter at the maximum Pensionable salary of fifteen thousand rs per month

What does this mean? Let's understand this but first, let's understand the 2 terms in the above formula

First, let's talk about how Pensionable salary is determined

So whatever is your last 60 months salary is

Sum it then Divide it by sixty. This will come out of your average Pensionable salary

Suppose the employee has taken too much leave then how will the average Pensionable salary be calculated

in that NCP days will be taken and calculated

in that case, the formula will change a little bit

it will be. Sum of EPS wages multiplied by 30 divided by 365 into 5 minus NCP days

According to this formula if you have NCP DAYS then you can calculate your average Pensionable salary

Which will be used in this formula over here

Now lets us talk about how to find pensionable service

PENSIONABLE SERVICE means for how many years you have contributed to the " Pension Fund "

Here your service could of 10 years, 15 years or more than 10 years according to how many years you have contributed

Here you have to take care of if your over-all service is more than 20 years then you will get

then you will get 2 years additional bonus

Suppose you have 19 years of service then pensionable service will be considered as of 19 yrs only

But, if your service is of 21 years then 21 + 2 = 23 year will be considered

YES !, here is also a Catch. You will be saying how many twists are there in this video. I am trying to tell u all

[ commentators doing commentary ]

The catch is. Earlier here rule was

IF your 20 years are completed on any date

then you will get your 2 years bonus in any condition

But, now the rule is - If you are applying for early pension means applying before 58 years

Then you will not get the bonus of there 2 years, you have to apply after 20 years + 58

then only you will be able for 2 years bonus

Now we have understood all the components of this formula now let's do the example

and then we will understand the concept of " PRO RATA "

Assume that an employee joined service at 1st September 2020. Why I am taking 1st September?

So that our calculation will be easier. That Employee never takes leave and always comes on service

And this Employee got to retire on 1st September 2020 after overall of 20 years of service

So, let's do this Employee's calculation of 20 years according to this formula

First, we will see what's his pensionable salary. pensionable salary as I told you

Should be average of last 60 months i.e last 5 years

As you know, after 2014 you can contribute pension on maximum 15k salary

For example, this Employee also contributed 15000 rs. And his sixty monthly average will come out 15k

So, now whats his pensionable service

As this Employee worked for 20 years. He should get a bonus of 2 years

Then overall comes 22 years. If we do 15000 * 22 Divided 70 then

this particular employee pension comes out to be 4714 RS

But friend this much pension is impossible to come out

Here, the concept of " PRO RATA " is applied

now let's understand the concept of PRO-RATA

The concept of PRO-RATA tells us:- before 1 September 2014

All the service calculations will be done accordingly 6500 and the after your actual pensionable salary

will be calculated

If your average Pensionable salary is coming out less than 6500 then the whole calculation will

be calculated on the basis of lesser one

But if it's coming out more than 6500, suppose 10000 or 15000

then all the components before 2014, will be calculated based on 6500

If you didn't get it, let's again work on this example

So this Employee joined service on 1 September 2000. Again why 1 September 2000, because its easy to calculate

So his today service is of 22 years. Out of 22 years first 14 + 2 years bonus

bonus is also 6500, cause calculation is going on

Total 16 years will be calculated based on 6500

And of remaining 6 years 2014 - 2020 this the calculation will be done according to 15000

Hence formula will be 14 plus 2 equal to 16 multiplied by 6500 plus 6 * 15000

divided by 70 and our this pension comes out to be 2771 RS

Here you saw that earlier the pension was 4714 which deducted and drops to 2771

This actual calculation is done by the PF department and according to this, your pension is being calculated

if we talk about Some employee whose date of joining is 1995 specifically before 16-11-1995

Here family pension scheme's small component also get added whose calculation is done based on 2 table

which both of them are given in employee pension scheme those tables are " 12 -3B " and " table B "

A factor comes out after multiplying them and this factory is nearly around 500 RS which have a major effect on pension

But if you have joined before 1995 then a small the component is added additional To your pension

Now let's talk about some real-life example which I recently applied for my father's pension

How calculation will be done there. This is PPO inquiry form and how to get it I'll tell you later

Remember here some few points which you also have to remember in your PPO form

first here is the pension amount. And this pension according to the calculation is 2099 RS

The value required for this calculation is given below in service details

In service details, you will see that overall actual service is of 18years 9months and 28 days

But here are some NCP days means leave taken for 31 day

After removing them the Pensionable salary come 18 years 8 months 22 days

first, you check it if it's correct or not

after that the Pensionable salary is the average of last 60 months salary

which is coming out eleven thousand one hundred sixty-seven rupees

So if you do calculations, not on the basis of PRO-RATA

and overall do 19 year's service multiplied by 11,187 divided of 70 which comes out to nearly 3100 RS pension

But you will see that pension is only 2100 RS

Once you get your PPO form or knows your salary then you can calculate your pension by yourself

You can download this PPO form from" PFK PENSIONER'S PORTAL "

If you don't know your PPO number then pensioner can give his member ID or by giving account number can get his PPO no.

Now, we got all the numbers, knows the Pensionable service and pensionable salary average is also

known by through PPO order number

One more thing I would like to tell you. The overall calculation in this formula is always in days form

that's why let me tell you the calculation in days form

first, you have to find out your overall day's service.

In this case, it was of 18 yrs 8 months 22 days after removing NCP days

When I convert it in days it turns to be "6932" days

After this, I want to see that, from 1995 till 2014 - 31 August. How many days are covered in service

And after that how many days are covered in service

Now, the days before 2014 will be calculated according to 6500 and remaining days

the calculation will be done on actually pensionable salary which is 11187

We have to multiple earlier days by 6500 and remaining days by 11187

and divide it by 365 * 70

look here the pension is coming out two thousand ninety-nine point six zero paise

A little bit of error in the round-off

The actual pension is coming out 2099.60 RS and our pension is coming out 2100 RS

Now in any case this pension can not be less than 1000 rs. As per the rule issue in 2014

that minimum pension of 1000rs will be given by the government and if in any case, it comes less than 1000 then also

1000 RS of pension is given by the government

In an employee pension scheme, there are few things which as a pensioner will give to quiet good profit

Here it's written " DELAY IN PENSION ". After 20 days of pension application

if your pension is not coming out properly processed.

Then in that case 12% additional interest will be given on that delay

And for that PF commissioner would be responsible

After all these many pensioners also have an issue.

That the employee hasn't done proper compliance or have some dues

which haven't paid .In such case act specifically mentions

that none of the pensioners will be published due to this

PENSIONER'S pension will be restrained as it is. It's PF department duty how it takes money from an employee

Before we proceed to bonus tip which is important , everything is clear on basis of the calculation

Earlier we think that PF pension can't be more than 7k or 7.5k. But now I have proved that if someone is

getting retirement in recent days having service around of 35 years !. After putting values in Formula

29 multiplied by 6500 plus six multiplied by 15000 divided by 70 then a maximum of 3500 RS

will be coming which is not at all sufficient for retirement so, that's why you should focus on your investment

If you are knowledgeable then you may invest in share market or mutual fund

or may plan for your retirement for this I personally prefer ZERODHA APP

FOR THE STOCK MARKET IT'S VERY SIMPLE AND TOO EASY TO OPERATE

HERE ALL SORTS OF INVESTMENT INCLUDING MUTUAL FUNDS ARE AVAILABLE

APP LINK IN THE DESCRIPTION. YOU ALSO, MAKE YOUR ZERODHA ACCOUNT

AND START YOUR RETIREMENT PLANNING FORM NOW

Now, let's talk about the bonus tips. In PF there are two more types of pension

1. deferred pension 2. early pension

In deferred pension, you can defer your pension till sixty years and can claim it after 60

And early pension:- suppose you left job at 50 years rather than 58

You can then also be able to start your pension after 50

This is known by many peoples.

This is also known that if you differ your pension, you will get an additional 4% pension per year

Just suppose that if your pension is 100 RS and start it in 59 you will get 104 RS

And if you are starting at 60 then pension would be 108.16 RS somewhat near it

On the other hand, if you start your pension at age of 50 it is reduced by 4 % in the age of 50, 100 RS pension will

Become or comes to 72.44 RS only

But the interesting thing is. If a employee defer his pension for 2 years,

Agreed his 100RS pension become 108 RS

But he has forbidden his 24 monthly pension

Because his pension would have start as he reaches the age of 58 years

Now that will start after 60 years of compilation

In this case to recover this 24 months Pension. That Employee has to wait almost for 25 years

Then the matter will reach a somewhat near. And after that suppose he/she is of 60 years

and lives till 85 then only he/she will gain benefit

So that's why I think is a very useless option

If a person starts early pension at age of 50 and not doing work,

in that particular case, he will only get 72 RS

But the point to remember here is,

overall he will gain an additional pension of 8 years

If he waits till 58 and then starts his pension . In that case the pension he earns in 20 years

he would have earned it before 8 years. early pension will always have benefit for you

And you should never defer your pension

and this is today's bonus tip. If you have the option

you are not working after 50 then start your early pension

Or if you want to defer your pension after 58 and then take it,

then it's not at all beneficial option for you

In this video the documents we created, we will share it on our telegram group

If you are haven't joined with LABOUR LAW ADVISOR on telegram then search on telegram about

LABOUR LAW ADVISOR and be a part of our community.

Besides this, this whole series for employee pension scheme

3rd episode is also coming soon if itís already there then I am giving you the link in the I button

And playlist link too, so watch 1st 2nd and 3rd video fully if you are a PF member

And if you liked this episode then just do a favor like the video and share with at least 1PF member

So that he could also get aware of his pension

That's all for today, episode become a bit technical

but I knew you have watched it carefully

JAI HIND, JAI BHARAT