Finance Pension Calculation

PENSION

Pension is a steady income given to a person after retirement from the organization.

Types of Pension Cases

(1) Superannuation

(2) Family Pension

(3) Voluntary Retirement (VR )

Rules

(i) The qualifying service for evaluation of pension is reduced to 20 years w.e.f. 01.09.2008. Earlier it was 33 years.

(ii) Pension is evaluated on the basis of the last 10 months average pay or last pay drawn whichever is beneficial to retiring employee

Ceiling

(a) For officers / employees retired in between 01.12.2005 to 31.12.2005

(i) Minimum Pension & Minimum Family Pension - Rs 2396 /- per month

(ii) Maximum Pension - Rs 24956 /- per month

(iii) Maximum Family Pension - Rs 14974 /- per month

(b) For officers /employees retired after 01.01.2006

(i) Minimum Pension & Minimum Family Pension - Rs 2972 / - per month

(ii) Maximum Pension - Rs 30946 /- per month

(iii) Maximum Family Pension - Rs 18568 /- per month

Terms related to the PENSION Calculation

(i) PENSION

(ii) DCRG (Death Cum Retirement Gratuity)

(iii) COMMUTATION

(iv) RESTORATION of Pension

(v) FAMILY PENSION

(i) PENSION

The pension amount is calculated based on the Basic Pay at the time of retirement, Age, Service years, etc. It is calculated as 50% of average emoluments of last 10 months salary drawn. It is calculated on Basic and Dearness Pay only.

Formula for Calculation of Pension Amount =

SMP

50% of Avg. emoluments (last 10 months) X --------

66

(ii) DCRG

• This is basically known as Gratuity. Gratuity is the amount given to the employee at the time of retirement.

• It is calculated on Basic, DP and DA.

• This amount is limited to maximum Rs.3,50,000 / - only.

Formula for Calculation of DCRG

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