[.sushilkumar]

Originally Posted by kavensri

Not entire EPF balance. Employer's contribution would go. Employee's contribution (along with VPF contribution if any) will still remain under PF balance.

Correct and if there is still a shortfall, you are expected to pay that from your bank account / Savings.

Anyone knows how the basic is being arrived at for the sake of EPS calculations. I am hearing it will be average of last 16 months basic salary. I could be wrong as well.

If above is true that it's unfair since salaries' have increased a lot post covid.

[thanixravindran]

Originally Posted by .sushilkumar

Correct and if there is still a shortfall, you are expected to pay that from your bank account / Savings.

Anyone knows how the basic is being arrived at for the sake of EPS calculations. I am hearing it will be average of last 16 months basic salary. I could be wrong as well.

If above is true that it's unfair since salaries' have increased a lot post covid.

As per Government it is Basic+ DA (Dearness allowance). If your company uses it, it would have been taken already into account.

I don't understand why it is average of 16 months for this transfer. It should be each month contribution that is adjusted.

[kavensri]

Originally Posted by .sushilkumar

Correct and if there is still a shortfall, you are expected to pay that from your bank account / Savings.

If you have not withdrawn any money from your PF corpus, then I do not think, you will be asked to pay anything extra. They can recover the 'differential amount' from employer's contribution in the corpus.

Originally Posted by .sushilkumar

Anyone knows how the basic is being arrived at for the sake of EPS calculations. I am hearing it will be average of last 16 months basic salary. I could be wrong as well.
If above is true that it's unfair since salaries' have increased a lot post covid.

It is Basic+DA. In most of the private companies, we will not be having DA component. So, it will just be Basic.
For the calculation of pension amount, the formula used will be
[[average of last 60 months Basic+DA]/70]x[number of years of contribution to pension fund + 2 years extra, if the number of years is more than 20]

For example,
If a person's last 60 months average basic+DA is Rs70000
If that person has contributed to EPS for 25 years
Then the pension amount per month would be [70000/70]x[25+2] = Rs27000

[.sushilkumar]

Originally Posted by thanixravindran

I don't understand why it is average of 16 months for this transfer. It should be each month contribution that is adjusted.

Originally Posted by kavensri

For the calculation of pension amount, the formula used will be

My sincere apologies for the confusion. My comments wrt to 16 months average was for calculating the initial payout to opt for Enhanced pension.

[skumare]

Originally Posted by kavensri

As per our analysis, if one of nearing the super annuation age (58), then it is definitely beneficial to go for it.

The scenario where a person has a massive jump in his/her basic+DA in the last few years just before retirement is the only case which will make me opt for the increased pension. This is one flaw in the regulations. Otherwise, there are quite a few options instead of opting for enhanced EPS.

[kavensri]

Originally Posted by skumare

The scenario where a person has a massive jump in his/her basic+DA in the last few years just before retirement is the only case which will make me opt for the increased pension. This is one flaw in the regulations. Otherwise, there are quite a few options instead of opting for enhanced EPS.

I agree with your assessment. The final pension amount depends on the average basic salary of last 5 years of service.

In my case, this number is quite high already and I have done my maths. So, based on my calculations, it was a no brainer for me to go for this scheme. This is, even if govt comes up with a new formula (with reduced pension amount) to calculate the final pension amount through some kind of amendments, before the scheme takes off.

Even otherwise, I am not completely depending on this pension amount alone for my survival, post retirement. This will just be one part of my total monthly projected income.

[supremeBaleno]

Originally Posted by libranof1987

If you do open a PPF account for her now, she'll have a healthy corpus by the time she starts working and compounding will ensure she's set well.

Obviously tax benefit can be claimed only on one PPF a/c.
But what about the total annual investment limit ? Is it ₹1.5 lakhs max across both PPF accounts (parent's & minor's) ? Or, is it possible to invest ₹1.5 lakhs in each account ?

[whitewing]

One big assumption is that there will be no changes in the rules to arriving a the pension in this "new" pension scheme.

In our office, we had an external consultant who did a Q&A and he was categorical in stating that the EPFO has made it clear that the rules can change over time. it may as well turn out that EPFO, based on financial realities, could decide to change the basis of the pension calculation from average of last 5years to average of contributions (with/without inflation adjustment).

Given the ambiguities around this scheme and me needing much more than a decade to reach the 58 years, have decided to keep away from this scheme, alluring as it may be.

[vsrivatsa]

As per my reading:
"The maximum annual PPF deposit limit of ₹1.5 lakh includes the parent’s contributions to the minor’s account and his/her own account ."

Reference: PPF Account for Minors

[kavensri]

Originally Posted by whitewing

One big assumption is that there will be no changes in the rules to arriving a the pension in this "new" pension scheme.

In our office, we had an external consultant who did a Q&A and he was categorical in stating that the EPFO has made it clear that the rules can change over time. it may as well turn out that EPFO, based on financial realities, could decide to change the basis of the pension calculation from average of last 5years to average of contributions (with/without inflation adjustment).

Given the ambiguities around this scheme and me needing much more than a decade to reach the 58 years, have decided to keep away from this scheme, alluring as it may be.

Even I feel that govt may come up with the changes to calculate the pension amount (for example, use average of basic for all the years instead of just last 5 years) as the current calculation looks unrealistic.
So, I have done my calculations assuming these changes. Even if they do such change, the final pension amount will still be good for me. Hence I went ahead and opted for this change.

Note: I still have 9 more years to go to reach super annuation age.

[SoumenD]

Looks like the new passbook page project didn't work out. I see the old passbook page back in action, that too as buggy as always.

[skumare]

I am assuming that EPFO will move 8.33% of Basic (greater than 15,000) + accrued interest from EPF to EPS retrospectively to sustain the revised pension in case one opts for it, is this correct?

What is the role of 1.16% in this scenario? What exactly does one need to let go (apart from Rs1250 monthly EPS contribution till date) to get the higher pension?

The labour ministry, on Wednesday, clarified that it would draw 1.16 % additional contribution from within the overall 12% of the contribution of the employers into the provident fund while computing the pension on higher wages

Read more at: Link

[INJAXN]

Any idea what this taxable all about ? What are the criteria's for taxing ?

[deehunk]

Originally Posted by SoumenD

Looks like the new passbook page project didn't work out. I see the old passbook page back in action, that too as buggy as always.

Some X person would have made money from the project, the last 9 years has seen continuous efforts to destabilise the EPFO. My ongoing struggle with EPFO, KR Puram finally ended after series of escalations against the staff.

[.sushilkumar]

Originally Posted by INJAXN

Attachment 2450017

Any idea what this taxable all about ? What are the criteria's for taxing ?

Any interest earned on employee contribution beyond 2.5 Lakh is Taxable. Accordingly EPFO have made provision to show the taxable eligible amount beyond 2.5 lL separately in PF slip.