How EPFO robbing even the Low-Paid employees with the introduction of pro-rata basis?

How EPFO robbing even the Low-Paid employees with the introduction of Pro-rata basis?

Calculation of Pension upto Ceiling was implemented primarily when there is jump in the contribution from 541/- (8.33% of the Ceiling of 6,500/-) in August, 2014 to 1,250/- (8.33% of the Ceiling of 15,000/-) in the month of September, 2014. 

Here the increase in Contribution in one month is 2.31 times. But EPFO is implementing Pro-rata calculation even when there is no jump from August, 2014 to September, 2014 i.e., 422/- (8.33% of 5,072/-) in August, 2014 and again 422/- (8.33% of 5,072/-) in September, 2014. 

Here is an example:

Name of the Employee…………………………XXXXXXX

Date of Birth…………………………………………01-03-1971

Date of Appointment……………………………01-03-1996 (25 years)

Date of attaining 58 years……………………28-02-2029

Wages as on 01-03-1971………………………1,500/-

With yearly increase of 7%

Wages reaches as on

29-02-2029 i.e., in 33

years to………………………………………………13,078/-

60 months average Wages from

September, 2009 to August,

2014……………………………………………………4,353/-

60 months average Wages from

March, 2024 to February, 2019………….11,475/-

Wages for the month of

August, 2014…………………………………….5,072/-

a) Basing on 12 months average:

13,078/70X35(33+2)=6,539/-*

b) On Pro-rata basis basing on calculation from 

01-09-2014 to 13-02-2024:

i) 4,353/840(12X70)X222=1,150/-*

ii) 11,475/840(12X70)X174=2,377/-*

(222+174=396/12=33 years)

Weightage:

iii) 4,353/840(70X12)X24(2X12)X222/396=70/-*

iv)11,475/840(70X12)X24(2X12)X174/396=144/-*

Total Pension: 1,150*+2,377*+70*+144*=3,741/-*

Pro-rata basis introduced from 14-02-2024:

i) 5,072/840(70X12)X(222+24(2X12)=248=1,497/-*

ii) 11,475/840(70X12)X174=2,377/-*

Total Pension: 1,497/-*+2,377/-*=3,874/-*

Summary:

1) Pension under Ceiling based on last 12 months average………..5,738/-(100%)

2) Pension under Ceiling on Pro-rata basis from

01-09-2014 to 13-02-2024……………………………………………………………3,741/-(65.2%)

3) Pension under Ceiling on Pro-rata basis from

14-02-2014………………………………………………………………………………….3,874/-(67.51%)

Wages:

1)1996-97: 1,500/-, 5) 2000-2001: 1,966/-, 10) 2005-2006: 2,758/-, 15) 2010-2011: 3,869/-, 20)

2015-2016: 5,427/-, 25) 2020-2021: 7,611/-, 30) 2025-2026: 10,675/-, 33) 2028-2029: 13,078/-

Note: Wages are always within the Ceilings of 5,000/-, 6,500/- and 15,000/- during the entire 33 years  service.