1) If last 5 -7 yrs salary is less than compared to previous 10/15 years salary then pension(EPS) will be less ? /how pension calculated ?Please explain with one example using formula 2) In EPF inoperative accounts (more than 3 yrs) can we get interest on the balance every year ? upto which age?

Ans: 1. Your EPS pension and salary history:

That's a good question! Yes, your EPS pension can be affected by your salary history. Here's why:

EPS contribution: Both you and your employer contribute a fixed percentage of your salary (capped at Rs. 15,000) towards EPS.
Lower salary, lower contribution: If your salary in the last few years was lower, the EPS contribution would also be lower. This can slightly reduce your final pension amount.
Calculating EPS pension can get complex, but here's a simplified idea:

Formula factors: Your pension considers your average monthly salary during a defined period, service duration, and a factor decided by the EPFO.
Lower average salary: If your average salary over the relevant period is lower due to recent pay cuts, the calculated pension might be slightly affected.
2. Interest on inactive EPF accounts:

Even inactive accounts (no contributions for over 3 years) earn interest. Here's how it works:

Interest accrual: You continue to earn interest on the existing EPF balance.
Interest rate: The interest rate is declared by the EPFO every year.
Age limit: There's no upper age limit for earning interest on your EPF balance.
Remember:

Reactivate accounts: If you rejoin a previous employer, reactivate your old EPF account to avoid creating a new one.
Claim process: You can claim your EPF and interest even after retirement.
Let a CFP help!

A Certified Financial Planner (CFP) can give you personalized advice on managing your EPF and planning for retirement. They can help you understand complex calculations and make informed decisions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in