Calculation of Higher Pension Option | is higher pension option Good? | EPS-95 | EPFO

by | Mar 1, 2023 | Retirement Pension | 36 comments




Calculation of Higher Pension Option | is higher pension option Good? | EPS-95

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38:01 It is 42 months not 42 years. Hence you will recover complete amount of higher pension submitted in pension fund, in 3 Years and Six months.

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Calculating the Higher Pension Option (HPO) is a decision that requires careful consideration. HPO is a retirement benefit offered by the Employees’ Provident Fund Organisation (EPFO) in India that allows employees to receive a higher pension than the regular pension. It is a voluntary option available to employees who have completed 10 years of service under the EPFO.

The HPO is calculated based on the employee’s total contributions to the EPFO and the number of years of service. The HPO is calculated as a percentage of the employee’s average salary over the last 10 years of service. The percentage is determined by the employee’s age at the time of retirement. The higher the age, the higher the percentage.

The HPO is offered under the EPS-95 scheme and is available to all employees who have completed 10 years of service under the EPFO. The EPS-95 scheme provides a higher pension amount than the regular pension. This higher pension amount is calculated using the formula:

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Pension = (Average Salary x Contribution Rate) + (Age Factor x Contribution Rate x Average Salary)

The contribution rate is determined by the employee’s age and the number of years of service. The age factor is determined by the employee’s age at retirement.

The HPO is a great option for those looking for a higher pension amount. It allows employees to receive a higher pension than the regular pension. However, it is important to consider the pros and cons of the HPO before deciding to opt for it.

The pros of the HPO include:

• A higher pension amount than the regular pension
• The option to receive a lump sum payment at retirement
• The option to receive a higher pension amount even after retirement

The cons of the HPO include:

• A higher contribution rate
• A lower return on investment
• A longer waiting period before receiving the lump sum payment

It is important to consider all the pros and cons of the HPO before deciding to opt for it. It is also important to understand the calculation of the HPO and the associated risks in order to make an informed decision.

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36 Comments

  1. firoz. kanpurwala

    i am joined in gscsc on 5-12-1988 and joined in gscsc provident fund trust on 3-2-1989 then joined eps95 from 16-11-1995 ? retired on 30-04-2004 than can i get higher pension?

  2. Akash

    Excellent explanation and appreciate entire video.. However, If monthly pension is 3 lakh to recover 1.26 crore.. you need 42 months not 42 years.. am i missing something ?

  3. Kushagra Verma

    As per our understanding epfo will calculate pension upto 2014 on prorata basis @ 6500
    Second differential amount to be paid wef 2014?
    Please confirm
    As your calculations will be totally different in case of persons retiring near ruture

  4. Wakar Labib

    We can recover the amount in 42 months or 42 year. Because you have divided total amount by monthly pension amount

  5. A N

    Higher Pension option 42 months mein recover hoga na ki 102 saalo mein…

  6. Subhamay Sharma

    Sir I have joind service 1995 and will retired 2028 july . My question is that how much money i have to pay.

  7. Mahesh Jadhav

    First explain, how it will take 42 years to recover 1.26 crore with monthly 3L income?

  8. Anonymous

    I am 42 year old and working in company ,My query is about what will happen if I opt new Pension schema, now I am getting 50,000 as basic pay, I done service for 20 years, if I loose job and not able to get,or If I move out of India for couple of years then how they calculate pensio, Scenario2 ,if I loose job and able to get only 20,000 as basic pay for next 5 years only then how it will be calculated, Scenario3: In last 5 years(53 to 58 years) of job if I get only 30,000 as Base pay then How It will be calculated>Please answer early as I need to provide declaration to my employer by March 1

  9. Rajesh Kanade

    I am retired 30/04/2022 I pay to epfo P F and salary 14000 on12/ .online aplictin not available.how to apple

  10. Nagesh Hosamani

    how pensionable salry is calculated in both old and new pension scheme.?

  11. Manoj Chakraborty

    it's 42 months to recover and not 42 Years

  12. Shankar R

    Sir Namaste, 854pm is my pension since Oct 2010, Dt of joining Service 1.1.82,
    Last salary B+DA, 1861+4432=6293/- on October 2002:; service after 15.11.95=6yrs 11m, 2d; 60months Avg wages= 4900; Last month wages 6293; Past service (before 15.11.95)13yrs, Wages on 15.11.95=3500pm . We were sent out on VRS; Company is closed. Qn is what is the hike in pension, whether we have to opt for higher pension?

  13. Amarkant Dave

    Sir Excel sheet share kare

  14. BISWANATH MAZUMDER

    I joined before 2014 and now in service.I am contributing 12% on my actual salary(on Rs. 55000) but My employer is not doing equal contribution, they are contributing Rs. 1800 (Rs.550 in EPF & Rs. 1250 in EPS). Please tell me whether I am eligible for higher pension, if no then whether now may i contribute the difference amount in EPS /pension fund.

  15. Samrat Ghosh

    Please give excel sheet where i calculate for mine

  16. Shahzad Khan

    Is.. Haier. Pansion. Ka. Abi. Portal. Nhi. Jari. Hua. Hai

  17. Shahzad Khan

    Bhai. Me. 28.o2..2021.ko.Ritayrd.Hua.Hnua.kirpya.Mujhe.Kya.Kerna.prega.Plese.Gaid.kre

  18. Navin Gurnani

    getting pension of 3 lakh per month is wrong. 3 lakh is for 1 year

  19. Pabha Dot

    अगर कोई १९९५ से पेन्शन स्किम मे है और मार्च २०१४ एंड मे रिटायर हुआ हो तो उसे कितना पैसा भरना होगा. बेसिक और डीए का एवरेज दस हजार रुपये पकडकर.

  20. Mr. Sachin

    In EPS formula average pensionable salary is monthly and not yearly. It should be 6L/12 that is 50 k pm. 50000*35/70 = Rs 25000 pension pm in higher pension case

  21. Mr. Sachin

    Why should we give Interest component for higher pension ??

  22. Priyadarsini Mishra

    After death of unmarried employee, shall nominee receive any corpus amount/ invested amount in pension fund

  23. Bharat Rajak

    Pensionable salary is the average of 60 months Basic+DA but you have considered only basic pay which is wrong. EPS is also deducted at 8.33% of Basic+DA therefore pensionable salary also includes both Basic+DA.

  24. Vijay Pratap

    Sir Can I get excel sheet, if possible please share

  25. Love c

    Higher pension is gold or not?

  26. Brijesh Singh

    Basic Rs 28000/ hai aur total salary 68000/ hai to calculation pension ka 28000/ se hoga ya 68000/ se ?

  27. Pv Philip

    Why the whole amount to be given to children. We will be giving them good education for a better job

  28. Rakesh Kumar

    Very lengthy calculations.

  29. Amit Singh

    Can you please share the XL sheet

  30. rajib mondal

    You have not considered the option of keeping the pf amount in fixed deposit after retirement. In that case what will be the outcome?

  31. Bhasmang Mehta

    Sir
    Humble correction of calculation.
    @ 38 min in video your calculation of pension recovery time is 42 months not 42 yrs. That's 3.5 yrs. No need to b alive up to 102 yrs. Pl, correct.

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