I am an EPF pensioner. Will I get the enhanced minimum pension of Rs 3,000 even if I haven’t opted for a higher pension?

I am an EPF pensioner. I retired on December 31, 1999, at the age of 48. I am getting a monthly pension of Rs 756. Now, I understand that the minimum EPF has been hiked from Rs 1,000 to Rs 3,000. Will I get the enhanced minimum pension of Rs 3000 even if I do not opt for a higher pension?

- Premanathan P

Reply by Tarun Garg from Deloitte Haskins and Sells LLP

Members of the Employees’ Pension Scheme, 1995, are eligible to receive a pension upon retirement, subject to satisfying the condition of having a contributory service for at least 10 years and attaining the age of 58 years. However, it is possible to avail of pension benefits at a reduced rate from 50–57 years. The monthly pension is calculated based on the below formula:

Monthly Member’s Pension = [Pensionable salary * Pensionable service] / 70 years (which is the average life expectancy)

• Pensionable salary is the average of the last drawn salary of 60 months preceding the date of exit of pension fund membership

• Pensionable service is determined with reference to the number of years of contributory service

The monthly minimum pension computed per the above formula was enhanced to Rs 1,000 per sub-paragraph 7A to Paragraph 12 of the Employees' Pension Scheme, 1995, effective 01 September 2014. There has been no further hike to this amount, although there were recommendations by the Parliamentary Standing Committee on Labour to do so. Since the pension received by the individual is less than Rs 1,000 p.m., he may contact his/ her Pension Pay Office to receive the minimum amount of Rs 1,000 per month.

(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)

Watch: Tata Punch iCNG launched at Rs 7.10 lakh, Tigor CNG and Tiago CNG updated; Check out specs, features of Tata Punch iCNG and its rivals Hyundai Exter CNG, Maruti Suzuki Fronx CNG

Watch: Grandmaster D Gukesh: Know all about the 17-year-old who ended Viswanathan Anand’s 36-year reign as the No 1 Indian chess player in FIDE rankings

Watch: Hot stocks on August 4, 2023: Suzlon Energy, Zomato, SBI, IRFC, Adani Power, Reliance Power and more

Watch: Jisoo is dating See You In My 19th Life actor Ahn Bo-hyun; first K-pop band BLACKPINK singer to announce relationship

Watch: Anurag Kashyap’s daughter Aaliyah Kashyap’s engagement party: Kalki Koechlin, The Archies cast Suhana Khan, Khushi Kapoor and Agastya Nanda, among guests at the celebration

Watch: Gal Gadot, Alia Bhatt’s Heart of Stone, Guardians of the Galaxy Vol 3, Choona, Made In Heaven Season 2, The Hunt For Veerappan: Check out movies, OTT series to watch this August