KNOW YOUR PENSION

PENSION CALCULATION MADE EASY



SOMETHING ABOUT PENSION


Minimum Pension Rs 1435/-   per month, who retire on or after 01.05.2005.

  Maximum Pension

Those who have got 33 years of qualifying service will get 50% of their average emoluments as Basic Pension and where the qualifying service is less than 33 years; the basic pension would be proportionate to their service.

Calculation of Basic Pension.

Average of 10 months pay prior to the date of retirement has to be calculated (pay includes BP + increment component of FPP+PQP).

Basic pension = (10 months’ Average Pay    x    No of years of service) / (2x33) 

Dearness Relief on Basic Pension.

In respect of employees who retire on or after 1.5.2005, Dearness Relief shall be payable for every rise   or   be recoverable for every fall, as the case may be of every 4 points over 2288 points in the quarterly average of the All India Average Consumer Price Index for Industrial Workers in the series 1960 = 100, at the rate 0.18% of Basic Pension.  

.

 Family Pension :

In the event of death while in service or after retirement, family pension shall be payable to spouse/dependents at the following rates w.e.f. 01.5.2005.

Scale of pay per month                        Amount of Family Pension

Upto Rs 5720                                        30% of the pay as family pension

                                                               with minimum of Rs 1435/-

Rs 5720 to 11440                                 20% of the pay as family pension

                                                              with minimum of Rs 1715

Above Rs 11440                                   15% of the pay as family pension

                                                               with minimum of Rs 2292 and

              Maximum of Rs 4784

KNOW ABOUT GRATUITY CALCULATION

GRATUITY --EASY TO UNDERSTAND

Gratuity

Gratuity is payable on death, retirement, permanent disablement or resignation of an employee and it is calculated by two methods as given below and the amount whichever is higher will be paid.   Gratuity amount up to 10.00 lacs is exempted from Income Tax.


GRATUITY OF AN EMPLOYEE IS CALCULATED WITH TWO METHODS AND WHICH EVER IS HIGHER IS PAID.

METHOD - I


Gratuity Act 1972:

An employee is eligible for gratuity after completion of 5 years of service.   The Gratuity payable under the act is 15 days wages for every completed years of service.   The maximum gratuity payable under the Act is Rs.10.00 lacs from 24.05.2010.

WAGES for this purpose will mean Basic Pay +Spl.Pay+ PQP + FPP (less HRA component) + Dearness Allowance).

The Calculation is as follows:

Gratuity Amount = (Wages) x No of year of service x 15/26
METHOD - II

(as par 10th Bipertite)

Gratuity as per Service Regulations

An employee is eligible for gratuity after completion of 10 years service.   The gratuity payable is 15 months pay up to 30 years of service plus additional 15 days pay for every completed years of service beyond 30 years
WAGES  for this purpose means BP + PQP + Increment component of FPP.


HOPE EVERY ONE CAN UNDERSTAND.


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