EPF pension: What is the formula for calculating pension amount?

A central government employee who retires under the Pension Rules is entitled to a pension after completing at least ten years of eligible service. Similarly, the Employees’ Provident Fund Organisation (EPFO) offers the Employees' Pension Scheme, a social security program for those with EPF accounts. Under the plan, workers in the organized sector are eligible for a pension upon reaching retirement age of 58.

Here are some important FAQs about how much pension an EPF member will get as per the EPFO website.

EPS pensioners to get pension from any bank, any branch, anywhere in India from January 1, 2025

What is the formula for calculating the Pension amount?

Pension= (Pensionable Salary (average of last 60 months) X Pensionable Service)/70.

What is the quantum of pension a member can get on his superannuation?

A member who joins the Employees’ Pension Scheme 1995 at the age of 23 and superannuates at the age of 58, and contributing to the (present) wage ceiling of Rs.15000/- may get about Rs.7500/- as pension if service is 35 years.
(Pensionable Salary X Pensionable Service)/70 = (15000x35)/70 = 7500

Can a member seek exemption from the Pension Scheme?

Individual member cannot seek exemption from the Pension Scheme. Only an establishment can seek exemption.

How the average salary is determined for granting pension?

The average salary is determined only for giving the pension to member. It is the average of last 60 months. (Non-contributory period, if any, is reduced)

What are the advantages of taking a Scheme Certificate?

1) It facilitates transfer of Pension Accounts when the employment is changed. 2) If the Holder of Scheme Certificate dies the family will get family pension

At what age a member is eligible for pension?

A member is eligible for pension on superannuation at the age of 58 years. If a member leaves employment between 50 and 57 years he can avail the early (reduced) pension.

What is the service required for giving pension in case of death of the member?

In case of death of a member, The family pension and children pension is payable even after receiving one month’s contribution (including part of the month) for Pension Fund.

If a member dies to whom the pension is payable?
On death of the member the Pension is automatically payable to the spouse (Widow/Widower). In addition, the children are also eligible till attainment of 25 years of age (2 at a time). Any disabled child in the family shall get disabled pension for life apart from the two child pensions.

In case the employer has failed to pay the pension contribution whether any pension is payable or not?
Non-payment of pension contribution by an employer will not affect the grant of Pension. Pension is guaranteed.

Is it compulsory to withdraw the pension benefit along with the P.F. amount?
No. A member can withdraw his PF amount (member share only) and maintain a lien in the Pension Scheme by availing a Scheme Certificate.

Is it compulsory to withdraw the pension benefit along with the P.F. amount?

No. A member can withdraw his PF amount (member share only) and maintain a lien in the Pension Scheme by availing a Scheme Certificate.

In the absence of family member whether a pensioner can nominate any other person to receive family pension?
No. In the absence of family member on the date of the death of the member (before eligibility for member pension), the family pension is payable to nominee and in the absence of a valid nomination it is payable to dependent father followed by dependent mother. Once the pension is received by the member there is no validity for nomination. A pensioner cannot nominate any person.

What will be the effect of unemployment period under the Pension Scheme?

The unemployment period will be excluded from the actual service. Pension is based on contributory service only.

Is it possible to exclude my spouse from receiving the family pension?
No. The spouse is an automatic beneficiary unless he/she is legally divorced.