New Delhi: People who are eagerly awaiting to avail PF pensions proportionate to their actual salaries, as per the Supreme Court ruling, are bound to be disappointed.
The calculations done by considering service periods prior to September 1, 2014 and after it as separate entities, is considered a major blow to the hopes of lakhs of people.
A circular was issued in PF offices on the decision on pensions in accordance with the Supreme Court verdict with examples. Notably, the pension formula hasn’t been tweaked and there lies the trap.
Different Time Periods
As per the pension formula, the pensionable salary will be multiplied with pensionable service and the final product is divided by 70.
However, the overall pension amount gets reduced owing to the proposed distinction between pensionable salaries/services prior to September 1, 2014 and after it. Those who have retired after the earlier mentioned date are very likely to get affected more.
Pensionable salary is the average of the sum total of salaries of an employee in the last 60 months of his service. However, as per the current decision, pensionable salary of an employee up to September 2014 will be calculated in tandem with salary he was receiving until then and the pensions post the period will be calculated separately.
Since the salaries of most of the employees rise in the later stages of their services, pensionable salary until 2014 will remain on the lower side.
Differentiation in weightage
A weightage of two years is given to people who have served more than 20 years in service. However, this gets added up to the period prior to 2014, further lowering the pensions.
Remember, EPF had issued multiple FAQs (Frequently asked Questions) in the month of June and December last year clearly specifying that the average of the sum total of the overall salary drawn by an employee in the last 60 months will be considered while determining the pensionable salaries.
However the latest decision of the authority in contradiction with the Supreme Court verdict and is more or less looked upon as an act of contempt of court.