Saturday, November 16, 2013

Confusing retirement policies of government - well meaning but ???

"EPFO caps pension contribution of firms" but why?

What puzzles me is that when I had retired, I had wondered about what my pension should be and I was informed that there was a cap of Rs. 6500. So, the fact that I took a job with much lower salary to teach had no impact on the pensionable amount.

Had it not been so, the pension amount would not have been so embarrassingly small! It makes me wonder if the information given me was correct but not enough to make me want to make the effort to verify it.

However, it does make me envy the generosity of government towards its own officials. This was illustrated recently by a couple. Both retired about 15 years ago. The husband was in a public sector employee and had a pension twice that of his wife's, who was in government service. Today his wife's pension is double his.

In the long term in our inflationary society, the lesson is that it is not the pension(unless one is a government employee or is married to one) but income from other investments which can ensure a comfortable life after retirement!

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