DAYANAND N.

MANGAONKAR
(Labour Law Advisor & Compliance Expert)
M : 98200 13747; Email : dnm@dcsgr.com;
Website : www.dcsgr.com

Synopsis on Higher Pension verdict of the Supreme

Court in the matter of EPFO & Anr. Etc. vs. Sunil
Kumar B. & Ors. etc. -- Calculation with Examples;
1. EMPLOYEES’ PENSION SCHEME (EPS-95) offers pension on retirement,
disablement, pension to widow and pension for nominees, Pension for Children upto
the age of 25 years.

2. This article explains how much EPS Pension you will get if you retire at the age of 58
years.

3. In past, on 1st April 2019 Supreme Court has given the decision that the pension to
be paid on actual salary rather than the capped salary (Rs. 15,000/- or Rs. 6,500/- per
month.)

1. WHAT IS EMPLOYEES ‘ PENSION SCHEME-95

• The Employees’ Pension Scheme or EPS is a Pension Scheme for the employees of
organized sector of private and public sector industrial establishments.

• This Pension Scheme is DEFINED PENSION SCHEME unlike NPS (since NPS gives
investment based returns and is market driven Scheme). While EPS gives a
guaranteed monthly pension after the retirement. Employees’ Provident Fund
Organization (EPFO) manages the Employees’ Pension Account of all those who are
contributing to EPF including Exempted and Recognised PF Trusts.

• HOW CORPUS OF THE PENSION FUND IS FORMED - THE FEATURES OF

EXISTING PENSION SCHEME:
I. Out of the employer’s monthly contribution of 12%, an amount @ 8.33%
goes into EPS subject to maximum of Rs. 1250/- pm and rest of the amount
to EPF.

II. Suppose an employee has salary (Basic + DA) of Rs. 1,00,000/- per month and
employer contribution is 12% then Rs. 1,250/- (i.e. Rs.15,000/- X 8.33 %) will
go to EPS and rest of the amount i.e. Rs. 10,750/- will go to EPF as
Employer’s contribution.

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 III. Monthly contribution to EPS is restricted to 8.33% of Rs. 6500/- = Rs. 541/- p.m.
and from Sep 2014 Rs. 1250/- pm (8.33% of Rs. 15,000/-).

Employee’s PF Employer’s PF

12% 12%
PF
8.33% 3.667%
PENSION PF
subject to max. of Rs. 1,250/- p.m.

PF
15.667%
IV. Lifelong Pension is available to the member and upon his death family members of
of the deceased member are entitled for the Pension. However, children are eligible
to receive pension only upto the age of 25 years and spouse till his/her death or till
he/she remarries whichever is earlier.

V. Pension is called Superannuation Pension if one gets pension on retiring on attaining

the age of 58 years.

VI. An employee can start receiving the Reduced/Superannuation Pension under EPS
only after rendering a minimum service of 10 years and attaining the age of 50/58
years.

VII. One can apply for EPS Pension from the date immediately following the date of
completion of 58 years of age notwithstanding that the person has retired or ceased
to be in the employment before that date.

VIII. Maximum & Minimum Pension one can get is Rs. 7,500/- per month and Rs. 1,000/-
per month.

IX. Maximum service for the calculation of service is 40 years.

X. The fraction of service for six months or more is treated as one year and the service
less than six months shall be ignored. So 9 (nine) years and 6 (six) months will be
rounded up to 10 (ten) years.

XI. If no wage is earned for a certain period, that period is to be deducted from the
service, as there will be no contribution to Pension Fund.

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 XII. EPS Pension is taxable and has to be considered under the head Income
from Salaries.

XIII. This EPS should not be confused with National Pension Scheme (NPS). NPS is another
Scheme for which separate deduction under section 80CCD of Income Tax is
available. NPS for private sector employees is voluntary scheme and nothing to do
with EPS .

2. PENSION BASED ON JOINING BEFORE 15th NOV, 1995 OR AFTER 15th NOV
1995.

Pension depends on your contribution to Pension Fund (subject to maximum of Rs. 1250/-
pm) and your number of years of membership to Pension Fund (EPS). There are two ways in
which pension can be calculated are explained as under;

a) If you joined after 15th Nov, 1995 AND

b) If you joined before 15th Nov, 1995 but will retire after 15th Nov, 1995.

FORMULA FOR PENSION IF JOINED AFTER 15.11.1995;

For those who joined after 15th Nov, 1995, the formula for calculation of Pension is simple
which is as under;
Average Pensionable Salary of past 60 months X No. of Years Pensionable Service
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NUMBER OF YEARS OF SERVICE IN CALCULATING EPS PENSION;

• You are eligible for pension after the 10 years of contributing to EPS.

• If your number of years of membership is less than 10, then you can withdraw your
EPS amount.

• Maximum service for the calculation of service is 40 years.

• If you have completed more than 20 years in Pensionable Service then add two
years bonus in above equation.

• The fraction of service for six months or more is treated as one year and the service
less than six months is ignored. So 9 years and 6 months will be rounded up to 10
years; 15 years 9 months will be rounded to 16 years but 15 years 3 months will be
rounded to 15 years only.

• Here Pensionable Salary means salary on which Pension is deducted (i.e. maximum
upto Rs. 15,000/- pm from 1.9.2014) and Rs. 6,500/- pm before 1.9.2014.

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 Example 1. How much pension will Mr. X will get if he works for 14 years from 1st
Jun 2015 and his average salary is Rs. 20,000/- p.m. Mr. X started his job on 1st Jun
2015. He works for 14 years. His average salary is Rs. 20,000 per month but for
pension service maximum salary considered is Rs. 15,000/- pm. So Mr. X’s Pension
from 2nd Jun 2030 will be Rs. 3,000/- ( i.e. 15,000/- X 14) / 70 );

HOW MUCH EPS PENSION WILL YOU GET IF YOU HAD JOINED BEFORE
15.11.1995;

• For a person who joined EPF before 15.11.1995, Pension calculation shall comprise
of following components:

(a) Past Service Benefit; AND

(b) Pensionable Service Benefit;

PAST SERVICE means the period of service rendered by an existing member from the date of
joining Employees’ Family Pension of 1971 till the 15th November, 1995.

PENSIONABLE SERVICE means period of service rendered from 16th Nov 1995. Same as the
calculation of Pension who joined after 15.11.1995;

HERE, THE FORMULA OF CALCULATION OF PENSION FOR THOSE WHO JOINED

BEFORE 15th NOV, 1995 IS AS UNDER;

• The pension for someone who joined before 15th Nov, 1995 is calculated in two
parts;

(a) Calculate the pension for the period after 16/11/1995, Pensionable service,
which is explained earlier.

(b) Calculate pension amount for the period before the 16/11/1995, Past Service
Pension.

EPS PENSION: PAST SERVICE COMPUTATION

• To calculate EPS pension amount before 15th Nov 1995, Table A is used which shows
Pension amount based on Basic Salary and number of years of service till 15th Nov
1995. The Pension is fixed according to the pay band and service period till 15th Nov
1995. If a person had basic salary of Rs. 3,000/- pm on 15th Nov 1995, and he had
worked for 16 years till 16th Nov 1995, then using the Table A, he would get Rs. 135/-
Pension per month for service before 16th Nov 1995.

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 TABLE A:

Sr. Yrs. of Past Past Service benefit payable on completion of 58 yrs of

No. Service age on 16.11.1995
Salary up to Salary more than
Rs. 2,500/- pm Rs. 2,500/- pm
1 Up to 11 yrs. Rs. 80/- Rs. 85/- pm
2 More than 11 yrs. Rs. 95/- Rs. 105/- pm
but up to 15 yrs.
3 More than 15 yrs. Rs. 120/- Rs. 135/- pm
but up to 20 yrs.
4 Beyond 20 yrs. Rs. 150/- Rs. 170/- pm

ENHANCED PENSION FOR RETIREMENT YEARS AFTER 15th NOV 1995;

• The employee, who retires after 15th Nov 1995 gets enhanced pension of the past
period.

• If any employee attains his 58 years after 16th Nov, 1995, his pension amount will be
multiplied by a factor stipulated in Table “B” according to the difference between
16.11.1995 and the retirement date i.e. date of completion of 58 years.

For example, If the above person, who worked for 16 years before 15th Nov 1995 retires on
20th Nov, 1996, he would get the pension of Rs. 151.47 (Rs. 135/- pm x 1.122).

TABLE B:
FACTOR FOR COMPUTATION OF PAST SERVICE BENEFIT;
Years Factor Years Factor Year Factor Year Factor
less than 1 yr 1.039 less than 10 yr 2.077 less than 19 yr 4.152 less than 28 yr 8.301

less than 2 yr 1.122 less than 11 yr 2.243 less than 20 yr 4.485 less than 29 yr 8.965

less than 3 yr 1.212 less than 12 yr 2.423 less than 21 yr 4.843 less than 30 yr 9.682

less than 4 yr 1.309 less than 13 yr 2.616 less than 22 yr 5.231 less than 31 yr 10.457

less than 5 yr 1.413 less than 14yr 2.826 less than 23 yr 5.649 less than 32 yr 11.294

less than 6 yr 1.526 less than 15 yr 3.052 less than 24 yr 6.101 less than 33 yr 12.197

less than 7 yr 1.649 less than 16 yr 3.296 less than 25 yr 6.589 less than 34 yr 13.173

less than 8 yr 1.781 less than 17 yr 3.560 less than 26 yr 7.117

less than 9 yr 1.923 less than 18 yr 3.845 less than 27 yr 7.686

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 EXAMPLE OF EPS-PENSION CALCULATION FOR THOSE WHO JOINED BEFORE
15.11.1995

1. Date of Joining 01/06/1985

2. Salary as on 15/11/1995 Above Rs. 2500/- pm
3. Salary on Completion of 58 years as on 01/01/2018 Rs 15,000/-.
4. Past Service 01/06/1985 to 15/11/1995 that
is 10 years.
5. Compensation, for Past Service as per Table A Rs. 85/- pm
6. But Retirement at age of 58 is on 01/06/2018, 5.649 as per Table B.
difference between 01/06/2018 and 15/11/1995 is
22 years, so the factor IS;
7. Past Service Benefit (Table A x B) : Rs. 85/- x 5.649 = Rs. 480/- pm
8. Pensionable Service from 15/11/1995 22 years.
9. Additional Weightage 2 years
10. Pensionable Salary (last 5 years/60 months): Rs.
11,600/- pm.
11. Pension Admissible Rs. 11,600/- x 24/70 = Rs.
3977/- pm
12. Total Pension: Rs. 3,977/- + Rs. 480/- pm = Rs.
4457/- pm

NOW BEFORE COMING TO THE LATEST SUPREME COURT JUDGMENT

DATED 4.11.2022, I WOULD LIKE TO TAKE ALL OF YOU THROUGH THE
GIST OF THE R.C. GUPTA CASE FROM WHERE REAL FIGHT ON THE ISSUE
STARTED AND FINALLY CONCLUDED ON 4.11.2022 VIDE VERDICT OF 3
BENCH JUDGES OF THE HONOURABLE SUPREME COURT;

What Para 26 (6) of EPF Scheme, 1952 says:

Para 26 (6) says…..Notwithstanding anything contained in this

paragraph [an officer not below the rank of an Assistant Provident
Fund Commissioner] may, on the joint request in writing, of any
employee of a factory or other establishment to which this Scheme
applies and his employer, enrol such employee as a member or allow
him to contribute more than rupees [fifteen thousand rupees] of his
pay per month if he is already a member of the Fund and thereupon
such employee shall be entitled to the benefits and shall be subject to
the conditions of the Fund, provided that the employer gives an
undertaking in writing that he shall pay the administrative charges
payable and shall comply with all statutory provisions in respect of
such employee.

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Hon’ble Supreme Court in the case of R. C. Gupta & Others etc. vs
RPFC, EPFO & Others etc. vide Civil Appeal No. (s) 10013-10014 of
2016 (arising out of SLP (C) of Nos. 33032-33033 of 2015, clearly
stated that “if both the employer and the employee opt for deposit
against the actual salary and not the ceiling amount, exercise of
option under Paragraph 26 of the Provident Fund Scheme is
inevitable. (Unavoidable).

Please note that exercise of the option under paragraph 26 (6) of

EPF Scheme is a necessary precursor to the exercise of option
under Clause11 (3).

EPFO’s H.O. Circular bearing No. Pen-1 / 12 / 33 / 96 /

Amendment / Vol. IV / 16762 dated 22.01.2019 says;

“However, if an employer and employee have contributed under the EPF

Scheme, 1952 on wages higher than the statutory wage limit, without
option of employee and employer and the EPF Account of the concerned
employee has been updated by EPFO, it can be inferred that joint
option of employee and employer has been exercised and
accepted by EPFO. Therefore, in such cases, for implementing the
directions issued vide Head Office Circular Pension-I/12/33/EPS
Amendment/96/Vol. II/34007 dated 23.03.2017, formal joint option of
employee and employer should not be insisted.

However, EPFO’s above referred Circular was withdrawn by the

EPFO on 07.02.2019.

Para 11(3) of the Employees’ Pension Scheme, 1995: The

maximum Pensionable Salary shall be limited to (Six Thousand and
Five Hundred Rupees per month)

Provided that if at the option of the employer and employee,

contribution paid on salary exceeding Rs.6500/- per month from the
date of commencement of this Scheme or from the date salary exceeds
Rs.6500/-whichever is later, and 8.33% share of the employers’
thereof is remitted into the Pension Fund, pensionable salary shall be
based on such higher salary.

Above proviso clause was also deleted on 01.09.2014 AND below

Clause was inserted under Para 11(4) of the Employees’ Pension
Scheme with effect from 01.09.2014;

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Para 11 (4): The existing members as on the 1st day of September,
2014, who at the option of the employer and employee, had been
contributing on salary exceeding six thousand and five hundred
rupees per month, may on a fresh option to be exercised jointly by the
employer and employee continue to contribute on salary exceeding
fifteen thousand rupees per month and the pensionable salary for the
existing members who prefer such fresh option shall be based on the
higher salary:

Provided that the aforesaid members have to contribute at the

rate of 1.16% on salary exceeding fifteen thousand rupees as an
additional contribution from and out of the contributions
payable by the employees for each month under the provisions of
the Act or the rules made thereunder:

Provided further that the fresh option shall be exercised by the

member within a period of six months from the 1st day of September,
2014:

Provided also that the period specified in the second proviso may, on
sufficient cause being shown by the member, be extended by the
Regional Provident Fund Commissioner for a further period not
exceeding six months

Provided also if no option is exercised by the member within such

period (including the extended period), it shall be deemed that the
member has not opted for contribution over wage ceiling and the
contributions to the Pension Fund made over the wage ceiling in
respect of the member shall be diverted to the Provident Fund account
of the member along with interest as declared under the Employees'
Provident Funds Scheme from time to time.

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FINALLY SEE WHAT SURPEME COURT JUDGMENT SAID AND WHAT WILL BE
THE IMPACT ON CALCULATION OF PENSION ON ACTUAL SALARY POST SC
JUDGMENT;

• The latest Judgment dated 04.11.2022 of 3 (three) Bench Judges

of Honourable Supreme Court accepted the verdict given by the
division bench in 2016 in the case of R.C. Gupta vs Regional
Provident Fund Commissioner (2016) as regards interpretation to
paragraph 11(3) of the pre-amended Scheme. In that judgment, it was
held that the date specified in Paragraph 11(3) of the pre-amended
scheme cannot be construed as a cut-off date. Based on this decision,
the Court held: The dual option, as is contemplated in Paragraph
11(4) of the Pension Scheme (post 2014 amendment), has to be
merged into one. In the event the employer and employee jointly opt
for coverage beyond the salary limit of Rs. 15,000/- pm, without
giving an earlier option under the unamended Clause 11(3) of the
Pension Scheme, they would not be automatically excluded from their
right to exercise option under Paragraph 11(4) of the Scheme, post
amendment."

PARA 44 OF THE SC ORDER DATED 4.11.2022 :- We accordingly hold and

direct…………………

i) The provisions contained in the notification no. G.S.R. 609(E) dated 22nd
August 2014 are legal and valid. So far as present members of the fund are
concerned, we have read down certain provisions of the scheme as
applicable in their cases and we shall give our findings and directions on
these provisions in the subsequent subparagraphs…………The Notification
dated 22.8.2014 (effective from 1.9.2014) was held as legal and valid
subject to certain conditions.

ii) Amendment to the Pension Scheme brought about by the Notification No.
G.S.R. 609(E) dated 22nd August 2014 shall apply to the employees of the
exempted establishments in the same manner as the employees of the
regular establishments. Transfer of funds from the exempted establishments
shall be in the manner as we have already directed…………….The said
Notification dated 22.8.2014 would be applicable even for EXEMPTED
establishments also.

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iii) The employees who had exercised option under the proviso to paragraph
11(3) of the 1995 scheme and continued to be in service as on 1st September
2014, will be guided by the amended provisions of paragraph 11(4) of the
Pension Scheme……………Employees who had exercised option of
contributing PF/Pension over and above Rs. 6,500/- pm and continued to be
in employment as on 1.9.2014 will eligible for provisions laid down under
para 11(4) which was inserted w.e.f. 1.7.2016. SC directed above since Para
11(3) was deleted w.e.f. 1.9.2014 vide Notification dated 22.8.2014.

iv) The members of the scheme, who did not exercise option, as contemplated
in the proviso to paragraph 11(3) of the Pension Scheme (as it was before the
2014 Amendment) would be entitled to exercise option under paragraph
11(4) of the post amendment scheme. Their right to exercise option before
1st September 2014 stands crystalised in the judgment of this Court in the
case of R.C. Gupta (supra). The scheme as it stood before 1st September
2014 did not provide for any cut off date and thus those members shall be
entitled to exercise option in terms of paragraph11(4) of the scheme, as it
stands at present. Their exercise of option shall be in the nature of joint
options covering pre-amended paragraph 11(3) as also the amended
paragraph 11(4) of the Pension Scheme. There was uncertainty as regards
validity of the post amendment scheme, which was quashed by the aforesaid
judgments of the three High Courts. Thus, all the employees who did not
exercise option but were entitled to do so but could not due to the
interpretation on cut off date by the authorities, ought to be given a further
chance to exercise their option. Time to exercise option under paragraph
11(4) of the scheme, under these circumstances, shall stand extended by a
further period of four months. We are giving this direction in exercise of our
jurisdiction under Article 142 of the Constitution of India. Rest of the
requirements as per the amended provision shall be complied
with……………All employees who did not exercise option for higher pension
on 1.9.2014 due to confusion of cut off date can now exercise their option
of higher pension within 4 (four) months from the date of the SC Order.

v) The employees who had retired prior to 1st September 2014 without
exercising any option under paragraph 11(3) of the pre-amendment scheme
have already exited from the membership thereof. They would not be
entitled to the benefit of this judgment………………………. Employees who
retired prior to 1.9.2014 without exercising option u/p 11(3) and have
already exited from the membership of the EPS Scheme (i.e. taken
withdrawal benefit or monthly pension benefit etc.) can not be given
benefit of higher pension.

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vi) The employees who have retired before 1st September 2014 upon exercising
option under paragraph 11(3) of the 1995 Scheme shall be covered by the provisions
of the paragraph 11(3) of the Pension Scheme as it stood prior to the amendment of
2014…………………………Employees who retired prior to 1.9.2014 upon exercising
option u/p 11(3) of the EPS Scheme can be given benefit of higher pension.

vii) The requirement of the members to contribute at the rate of 1.16 per cent of
their salary to the extent such salary exceeds Rs.15,000/- per month as an
additional contribution under the amended scheme is held to be ultra vires
the provisions of the 1952 Act. But for the reasons already explained above,
we suspend operation of this part of our order for a period of six months.
We do so to enable the authorities to make adjustments in the scheme so
that the additional contribution can be generated from some other legitimate
source within the scope of the Act, which could include enhancing the rate of
contribution of the employers. We are not speculating on what steps the
authorities will take as it would be for the legislature or the framers of the
scheme to make necessary amendment. For the aforesaid period of six
months or till such time any amendment is made, whichever is earlier, the
employees’ contribution shall be as stop gap measure. The said sum shall be
adjustable on the basis of alteration to the scheme that may be
made…………………Employee need not to contribute additional 1.16% of their
Salary over and above Rs. 15,000/- for opting towards higher pension,
however, EPFO has been given time of 6 (six) months to come out with
source to generate funds in legitimate manner to compensate with 1.16%
of contribution. Consequently, employees opting for such higher pension
will have to contribute additional amount of 1.16% atleast for next 6
months for contributing towards higher pension. After 6 (six) months SC
will give directions to the EPFO about such 1.16% collected from the
employees from the date of exercising such option.

viii) We do not find any flaw in altering the basis for computation of pensionable
salary…………………….Vide Notification dated 22.8.2014, EPFO had modified
formula for computing monthly pension payable to the members which
increased from 12 months to 60 months for computing average pensionable
salary. SC refused to interfere in said computation method and hence, the
said system of computation of average pensionable salary based on 60
months’ average shall continue as it is as against earlier method of
comouting the same on 12 months’ average salary.

ix) We agree with the view taken by the Division Bench in the case of R.C. Gupta
(supra) so far as interpretation of the proviso to paragraph 11(3) (pre-
amendment) Pension Scheme is concerned. The fund authorities shall
implement the directives contained in the said judgment within a period of
eight weeks, subject to our directions contained earlier in this
paragraph………………EPFO to implement all above directions given in the
judgment within a period of 8 (eight) weeks and should come out with
white paper thereon for the benefit of the member-employees.

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SC also observed that if employee has opted permission to contribute on the salary more
than the statutory limit of Rs. 15,000/- (or Rs. 6,500/- pm) as the case may under Para
26(6) of the EPF Scheme, 1952, then such member-employees need not to seek separate
permission under Para 11(3) or 11(4) of the EPS Scheme, 1995 and application u/p 26(6)
should be considered as application under para 11(3) or 11(4) .

WHAT IS THE COMPLIANCE EMPLOYEE AND EMPLOYER

NEED TO DO UNDER THE EPS, 1995 FROM 01.09.2014 FOR
HIGHER PENSION BENEFIT;

Sr.No. Nature Compliance for receiving Higher Pension Benefits

1 All employees (retired or serving) who were members of EPS,1995 as on 1st September 2014 are eligible to give
option for receiving pension on Pensionable Salary to be calculated based on service during entire membership
period.
2 Joint option to be submitted by the employee and by the employer and option of separated/left employees to
be also signed by the ex-employer.
3 The option should be given to the EPFO within 4 months i.e. on or before 3rd March 2023.
4 EPFO has to come out with implementation circular within 8 weeks i.e.. on or before 3rd January, 2023.
5 Employer has to dig-out records for making arrears calculations. Supporting records may have to be produced
as and when asked by EPFO in support of Pension Claim and for Inspection and Audit by the EPFO Authorities, if
required.
6 The accuracy of calculation needs to be assured to avoid rejection of Higher Pension claim by the EPFO.
7 As Option/Joint Declaration has to be signed by the Employer also, onus of the calculation of arrears with
interest will be on employer.
8 Transfer of Fund from PF to EPS with EPFO will be done with up-to-date interest.
9 The rate of interest may be the statutory rate of interest of PF as declared by
the EPFO for the respective years.
10 However, EPFO may insist that if rate of interest earned by exempted PF Trust is higher, than statutory rate then
interest should be paid at the higher rate.
11 For the next 6 (six) months i.e. till 3rd May 2023, employees have to contribute additionally to EPS Corpus @
1.16% of salary above Rs.15,000/- pm (from 01/09/2014) as additional contribution subject to refund after 6
months in case any other source is notified by Govt or EPFO through legal means for funding this additional
contribution requirement of Pension Fund (one way could be increase in the rate of employers contribution to
PF for
diversion to Pension Fund).
12 Remittance of arrears of contribution to EPS corpus and payment of pension arrears by EPFO are independent
actions. Remittance of contribution has to occur first. Th14ere is no likelihood of set off. First arrears have to be
paid then only revision in pensi15on will happen.
13 Arrears of Pension Payment by EPFO will be in lumpsum from the month of start of Pension (58 yrs. of age )
till now and would be subject to income tax deduction when received in the relevant previous year / assessment
year.
14 Contribution to the corpus will not be allowed as deduction from income under 80C. Pensioner may claim
section 89 benefit, but not sure whether EPFO pension arrears come under section 89 and be ready to pay the
due income tax when received.
15 Wait for the further update about the amount payable and expected Pension receivable
16 Bottom line is that member shall be eligible for Higher Pension benefits; only if Employer and Employee jointly
exercise this option in prescribed format and employee allows his/her employer to remit the arrears
of/difference of contribution with interest thereon (as stated above) to Employees’ Pension Fund;

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 Table Showing Calculation of contribution on restricted salary and actual Salary
(with revised pension on actual salary)

POINTS TO BE NOTED BEFORE GOING IN FOR HIGHER PENSION BENEFITS-RISK ANALYSYS;

1 Looking at the above figures of Return on Investment (ROI), it looks fair enough that one
should go for higher pension since Higher Pension Scheme is beneficial for the member-
employees who have long life (WHICH IS ALWAYS UNCERTAIN);
2 But it depends upon many other factors too such as after the death of
subscriber/member the spouse gets only 50% Pension and after his/her death the
money is lost since children by time would cross 25 years of their age and after 25 years
they are not eligible for Children Pension.
3 Option of investment of the differential amount paid for getting higher pension should
also be explored to have a higher rate of return than the investment in Pension.
4 Viability of the Scheme in the context of EPFO for giving the Pension at a rate higher
than the market rate. This factor was time and again highlighted by the EPFO but there
is no supporting data available with the EPFO to substantiate this argument.
5 Higher Pension benefit is subject to Income Tax deduction.
6 Calculation is based on assumed figure of salary. The calculation and decision to be
taken depends on person to person based on his actual data.

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