New Delhi. Employee Pension Scheme: If you are a beneficiary of Employee Pension Scheme (EPS), then there is good news for you. There has been a long-standing demand to remove the capping on EPS.
Now the Supreme Court is also hearing in this matter. Let us tell you that the members of Employees’ Provident Fund (EPF) also become members of EPS. 12% of the salary of any EPF account holder goes to PF. The same money also goes to the employer’s account and a part of it gets deposited in EPS. The contribution of basic salary in EPS is 8.33%. But the limit of pensionable salary is Rs 15,000. In such a situation, only a maximum of Rs 1250 can be deposited in the pension fund every month.
Now this is the rule
According to the rules, if the basic salary of an employee is Rs 15,000 or more, then Rs 1250 will be deposited in the pension fund. If the basic salary is 10 thousand rupees, then the contribution will be only 833 rupees. The calculation of pension on the retirement of the employee is also considered as the maximum salary of 15 thousand rupees only. In such a situation, after retirement, employees can get only Rs 7,500 as pension under EPS rule.
If the limit of 15,000 is removed, you will get more than Rs 7,500 pension
According to EPFO’s Retired Enforcement Office Bhanu Pratap Sharma, if the limit of Rs 15,000 is abolished from the pension, then more than Rs 7,500 can be got pension. But, for this, the contribution of the employer to the EPS will also have to be increased.
This is how EPS is calculated
Formula for EPS Calculation = Monthly Pension = (Pensionable Salary x Number of Years Contribution in EPS Account)/70.
If someone’s monthly salary (average of last 5 years’ salary) is Rs 15,000 and the duration of the job is 30 years, then he will get a pension of only Rs 6,828 per month.
How much pension will you get if the limit is removed?
If the limit of 15 thousand is removed and your salary is 30 thousand then you will get pension according to the formula (30,000 X 30) / 70 = Rs 12,857.
Here are the rules of pension
If you want to withdraw EPF amount, then you can withdraw the amount deposited in your account anytime. Whether your job is of 6 months or 10 years. But, you may face some problem to withdraw the amount of pension. Because, there are many rules for this, which you should understand. Let us know what can be done with the pension amount in different situations?
Existing Rules for EPS
- Must be an EPF member.
- Must be in job for at least 10 regular years.
- Pension is available on attaining the age of 58 years.
- Option to take pension after 50 years and even before the age of 58.
- On taking the first pension, you will get the reduced pension.
- For this, Form 10D has to be filled.
- On the death of the employee, the family gets pension.
- If the service history is less than 10 years, then they will get the option to withdraw the pension amount at the age of 58 years.
