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Will my 54-year-old wife get a higher pension after 25 years of service?

Milind Vadjikar |1238 Answers |Ask -Follow

Insurance, Stocks, MF, PF Expert - Answered on Dec 02, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more

Question by P on Nov 23, 2024Hindi

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(My wife age is 54 years and working in a private school since more than 20 years. she is contributing to EPF from the joining. Upto MARCH 2015an amount of RS 780/- is deducted from her salary (i.e.12% of 6500 wages) & 780 by employer. From APRIL2015 an amount of RS 1800/- is deducted (i.e. 12% of 15,000 wages) & 1800 by employer. Is she eligible to get higher pension of 15,000 or not? if not how much pension she will get by 2028. By 2028 total employee contribution is 5.2 lakhs & 5.2 lakhs by employer. Total service by 2028 will be 25 years.

Ans: Hello;

Formula for monthly pension under EPS is:

Monthly pension=(pensionable salary X pensionable service)/70

The pensionable salary is the average monthly salary of the last 60 months.

Pensionable service is in number of years while being EPFO member.

Also EPF and EPS are two separate schemes.

EPF you get as lumpsum on retirement while EPS is the pension scheme.

12% of employee contribution and 3.67% of employer contribution goes towards EPF

While only 8.33% of employer contribution goes towards EPS.

As per above formula, your spouse may expect a monthly pension of around Rs. 5350/- after completion of 25 year service.

Best wishes;

Asked on - Dec 02, 2024 | Answered on Dec 02, 2024

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Thank you very much for your reply sir. Can she opt for higher pension of RS 15,000/- per month ? If so what is the procedure to be adopted ?

Ans: Hello;

The current maximum monthly pension payable under EPS is Rs. 7500/-.

So getting 15 K monthly pension is not possible.

The EPF fund which she will receive after retirement may be invested in an immediate annuity/bank FD/POMIS to get additional monthly income.

Best wishes;

Asked on - Dec 03, 2024 | Answered on Dec 03, 2024

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Thank you very much sir

Ans: You are most welcome!!

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