Money Excel - Personal Finance Blog

Menu
MENUMENU
MENUMENU
  • Home
  • Business Ideas
    • 225 Small Business Ideas
    • 40 Online Business Ideas
    • 20 Business Ideas for Beginners
    • 20 small manufacturing business
    • 30 Food Business Ideas
    • 100 Business Ideas low investment
  • Stock Market
    • Best Demat & Trading Accounts 2021
    • Best Virtual Trading Apps
    • Best Stock Screener
    • Best Discount Brokers in India
    • Multibagger Stocks of LockDown
    • Rakesh Jhunjhunwala Portfolio
  • Mutual Funds
    • Best Mutual Funds 2021-22
    • Best Direct Mutual Fund Platform
    • Best Mutual Fund Mobile Apps
  • Incometax
    • Income Tax Calculator FY 2020-21
    • Latest Income Tax Slab FY 2021-22
    • Income Tax Refund Request
    • Pay Advance Tax Online
    • Download New 15G -15 H Forms
  • Investment
    • Best Investment Options 2021
    • Long Term Investment Options
    • Best Investment Regular Income
    • Best Investment Options NRI
  • Credit Card
    • Best Credit Cards 2021-22
    • Best credit card for online shopping
    • Best Forex Card in India
    • Best Business Credit Cards
    • Credit Cards against Fixed Deposit
  • Insurance
    • Best Term Insurance Plans 2021
    • Best Health Insurance 2021
    • Best LIC Policy 2021
    • Best Car Insurance Companies
    • Best Mobile Insurance Companies
  • Downloads
Home
Personal Finance
EPFO New Rule – How to get 8.16% Extra Pension for a lifetime?

EPFO New Rule – How to get 8.16% Extra Pension for a lifetime?

Raviraj Parekh May 21, 2020

extra pension

Do you want to increase your pension amount? If yes, your wish is accepted. EPFO has recently released a new rule for the pensioners covered under employee pension scheme As per new rule a pensioner has the option to increase the pension amount by 4% or 8.16% for the lifetime. In order to increase the pension amount pensioner needs to defer the age of starting a pension. Till now, pension starts at the age of 58 years no matter you retire at the age of 60 years or 62 years. However, now you have the option to defer pension starting age and increase the pension amount. Let’s demystify this new EPFO rule of pension in detail.

Also Read – NPS – New Pension Scheme with New tax benefits

How to get extra pension benefit for a lifetime?

Defer Pension without contribution –

Option -1 – Defer your pension for 2 years without contribution and you can get 8.16% extra pension for the lifetime. In case you cannot afford to delay pension for 2 years you have following option.

Do not miss below posts -
  • How you can beat Inflation?
  • RBI Withdraws Currency Notes Issued Prior To 2005
  • Pradhan Mantri Suraksha Bandhan Yojana Scheme

Example –

Suppose you are going to get the pension of Rs.5000/month after 58 years. If you select option -1 and postpone payment of pension till 60 years you will get 8.16% extra pension. This means your revised pension amount will be Rs.5408/month. (5000 x 1.0816).

Option -2 – Defer your pension for 1 year without contribution and you can get 4% extra pension for the lifetime.

Example –

Suppose you select option -2 and postpone payment of pension till 59 years you will get 4% extra pension. This means your revised pension amount will be Rs.5200/month. (5000 x 1.04).

new epfo rule extra pension

Defer Pension with contribution –

If you want to increase your pension further you can opt to continue a contribution in the pension fund and defer the pension payment age. Your contributory service after 58 years of age will be included in a calculation of pensionable service and pensionable salary.

Also Read – National Pension Scheme and Atal Pension Yojana main differences

The decision of increasing in original pension amount under this condition is left on pension division. The following options are given to determine pension amount with the contribution.

  1. Pension as on date of exit between 58 and 60 years.
  2. Pension as on date of exit between 58 and 60 years +4% of pension (as on date of exit) for every completed year up to 60 years.
  3. Pension as on date of exit between 58 and 60 years +4% of pension (as on age of 58 years) for every completed year up to 60 years.

Under second option you will get highest pension payment.

For more information, you can refer to Pension Notification released on EPF site.

Eligibility and Applicability –

  • The subscribers who are not already pensioners of EPFO and have completed at least 10 years of service on attaining the age of 58 years shall be eligible.
  • If you are already drawing pension you can not apply for a higher pension.
  • The new benefits will be applicable to the EPF members on or after April 25, 2016.

How to apply for this benefit?

  • EPF subscriber can execute the option to defer the pension with a contribution by submitting a request letter to field officer.
  • The request letter is to be submitted by the subscriber within prescribed time limit decided by pension division head office.
  • EPF subscriber can submit the claim form in case he wants to defer pension without contribution.

Conclusion –

If you are not in need of pension amount at the age of 58 years it is better to defer your pension payment for two years. It will increase your pension by 8.16% for the lifetime.

Tweet
Share
Whatsapp
Pinterest
Prev Article
Next Article
Tags:EPFO Pension rule extra pension how to get extra pension increase pension New EPFO rule new epfo rule increase pension

About The Author

Raviraj Parekh

Raviraj is the man behind moneyexcel.com. He is PGDBA, engaged in blogging for 10 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

Leave a Reply Cancel Reply

Search

Top Posts & Pages

  • Income Tax Calculator FY 2020-21 (AY 2021-22) – Excel Download
  • Rakesh Jhunjhunwala Portfolio Holdings - March 2021
  • 20 small manufacturing business ideas with low cost
  • Download Income Tax Calculator FY 2021-22 (AY 2022-23)
  • Cash Deposit Machine Locator – How to find CDM Near You?
  • How to check Property Records and Land Records online in India?
  • 235 Small Business Ideas with Low Investment in 2021-22
  • 30 Food Business Ideas with low investment
  • 10 Best Small Trading Business Ideas
  • Top 60 Manufacturing Business Ideas

Subscribe to Blog via Email

Join 5,475 other subscribers

Follow MoneyExcel

Money Excel – Personal Finance Blog

Personal Finance Blog
Copyright © 2021 Money Excel - Personal Finance Blog
| About |Downloads | Contact Us | Sitemap | Disclaimer | Privacy Policy |