Service under Family Pension Scheme eligible for 2-year bonus

By: | Updated: July 25, 2016 10:16 PM

Labour Ministry has decided to include the service period under the erstwhile Family Pension Scheme 1971 to fulfil the condition of 20 or more years of services to be eligible for two years of bonus while calculating pension. The move will benefit many members whose pensionable service has been more than 20 years or more, but they contributed under Employees' Pension Scheme 1995 (EPS-95) for less than 20 years.

Pension regulator directs more transpancy on family pension details payable?The Labour Ministry has accepted the proposal of retirement fund body EPFO to include the service period of erstwhile Family Pension Scheme 1971 for granting two-year bonus under EPS-95 in view of a lot of litigations,? a senior official said. (Representative Scheme)

Labour Ministry has decided to include the service period under the erstwhile Family Pension Scheme 1971 to fulfil the condition of 20 or more years of services to be eligible for two years of bonus while calculating pension. The move will benefit many members whose pensionable service has been more than 20 years or more, but they contributed under Employees’ Pension Scheme 1995 (EPS-95) for less than 20 years. “The Labour Ministry has accepted the proposal of retirement fund body EPFO to include the service period of erstwhile Family Pension Scheme 1971 for granting two-year bonus under EPS-95 in view of a lot of litigations,” a senior official said. “The benefit will be available to all settled cases of pension and existing members of the EPS-95. This will benefit existing pensioners as their pension will increase.” At present, the members of Employees’ Pension Scheme 1995 who complete 20 or more years of service are rewarded with a two-year bonus or weightage while calculating their pension. Under the Family Pension Scheme 1971, the employer, the employee and the central government used to contribute 1.16 per cent of the basic wage each, which meant a contribution of 3.48 per cent. The EPS-95 provides for contribution of 8.33 per cent of basic wages by the employer while for the central government, it stands at 1.16 per cent, which translates into a contribution of 9.49 per cent of basic wages under the scheme.

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