Sunday, 31 August 2014

Employees Provident Fund and Miscellaneous Provisions Act 1952: Pension Fund and Pension of Employees: Sec 6A

The central government has prepared the pension scheme for the benefit of employees this pension scheme provides that after retirement of employee’s pension will be given.

After retirement pension is given to employees and after the death of employee pension is given to the widow and children of employee.
The normal pension of employee = 50% of last salary of employee before retirement.

Family Pension:
  • Family pension means the pension given to employee’s widow and children after the death of employee.
  • Widow pension is given till the death or remarriage of widow.
  • Children pension is given till attaining majority.
  • The widow pension is 50% of employee’s pension and the children pension is 25% of employee’s pension.
  • Children pension is given for up to two children.

Employee Mr. R was receiving pension Rs 20000 per month, he died after which pension is to be given to his widow and one child.
The total pension given to widow and child in the above case will be
Rs 10000 +  5000 = 15000

Nature of payment of pension:
Pension may be given by the employer on monthly basis or annual basis.
Sometimes the pension is given for many years in lump sum and is known as commuted pension.
The pension given to employees may be commuted as per the choice of employer and employee. If the pension is given for many years in lump sum then after those years if the employee is alive then pension will be given to employee after that time period also.

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