Higher Pension Scheme India 1995

Higher Pension Scheme India

Higher pension Scheme India is a employee pension scheme offered by the Employee Provident Fund Organization (EPFO) in India. It allows employees to contribute a higher amount of their salary towards their pension, which will result in a higher monthly pension after retirement. The higher pension contribution is 8.33% of your actual basic pay, as opposed to the 8.33% of your pensionable salary capped at Rs 15,000 per month.

PF Contribution Employee & Employer

The Employee PF Contribution is done by both Employee & Employer. 12% of PF has been deducted with Employee contribution and Employer has contributed 12% of the PF. Total 24% of the PF contribution is deposit to the PF Contribution.

PF & Pension Contribution

The Total 24% of the total PF & Pension has been split in to two PF & Pension Contribution.  12% of Employee PF Contribution is contributed into PF A/C No. 1 and 3.67% of the Employer contribution has been go into PF A/C No. 1. The 8.33 of the Pension Contribution has been go in to the EPF Pension A/C No. 10. As per the current calculation Rs.1250/- (Max cap will go to the EPS Pension A/C No. 10 ie Rs.15000/- (Basic + DA)

Current PF Calculation Example

Below is the example of the current PF Calculation

PF Calculation when opting Higher Pension Scheme India

Below is the example of opting Higher Pension Scheme India Calculation

Benefits of Opting Higher Pension Scheme India

The amount of your monthly pension will depend on your average basic salary for the last 5 years of service, your age at retirement, and the number of years you have contributed to the higher pension scheme.

The Pension Calculation formula is derived as

Pension Calculation = Average 60 Months PF Basic /70 * Numbers of years of Service

Here is the example for current PF Pension Calculation and Opting for PF Higher Pension Calculation if the Average Basic Salary is Rs.30000/- and years of Service is 10 Years.

Pension Calculator

You can calculate your pension using the below PF Pension Calculator

How to Opt for Higher Pension Scheme India

For Opting Higher Pension Scheme you have to follow the below steps

1. Login in to the PF Member Portal or click on the link https://unifiedportal-mem.epfindia.gov.in/memberInterfacePohw/member
2. Enter the PF UAN, Aadhaar Card and Service Details etc
3. Upload 26(6) Joint Declaration form and PF Contribution details.

Last date for applying higher pension is 26th June 2023.

There are a few benefits to opting for the higher pension scheme. First, it will give you a guaranteed income stream after retirement. Second, it will free up some of your EPF corpus, which you can then invest in other financial products to grow your wealth. Third, it will reduce the burden on you of undertaking exhaustive retirement planning.

However, there are also a few drawbacks to the higher pension scheme. First, it will reduce the size of your EPF corpus, which you can then withdraw as a lump sum after retirement. Second, you will have to pay a higher contribution towards your pension, which will reduce your take-home salary.

Ultimately, the decision of whether to opt for the higher pension scheme is a personal one. You should weigh the benefits and drawbacks carefully and decide what is best for your financial situation.

Here are some things to consider when deciding whether to opt for the higher pension scheme:

• Your current financial situation
• Your retirement goals
• Your risk tolerance
• Your investment knowledge
• Your age
• Your expected retirement ages

If you are unsure about whether the higher pension scheme is right for you, you should speak to a HR or PF advisor.