EPFO Manage EPS: EPS is a pension scheme run by EPFO. This scheme is for retired employees who have worked in the organized sector. Let us know about it in detail.
Employee Pension Scheme (EPS) is a retirement scheme managed by EPFO. That means EPS is a pension scheme run by EPFO. This scheme is for retired employees who have worked in the organized sector, but the benefit of this scheme can be availed only when an employee has worked for at least 10 years, although it is not necessary that this job has been done continuously. .
Very few people here know that a part of the amount deposited in the PF account goes to the EPS account for pension fund. In such a situation, you would also like to know that if you have deducted money from your salary for EPS, then how much will be your pension after 20 years, 25 years and 30 years of service.
Let us tell you that EPS was launched in the year 1995 and existing and new EPF members could join this scheme. Every month, 12 percent of the employee’s basic salary + DA is deposited in the PF account. The employer/company’s contribution is also only 12 percent. Out of the contribution made by the company, 8.33 percent amount goes to the employee’s pension fund (EPS Fund) and the remaining 3.67 percent amount goes to the PF account.
EPS: What should be the eligibility for pension?
- You must be a member of EPFO.
- You may have worked for 10 years, even if not continuously.
- You will get the benefit of pension only when you have turned 58 years old.
- You can start withdrawing money from EPS when you turn 50 years of age.
- You can defer your pension for 2 years (up to 60 years of age), after which you will get pension at an additional rate of 4% every year.
Pensionable salary: Amount to be deposited into pension account every month
According to the current rules, 8.33 percent of the salary of any employee is deposited in his pension account. However, the maximum limit of pensionable salary is Rs 15 thousand. In such a situation, if a person’s salary is Rs 15000, then Rs 15000 X 8.33 /100 = Rs 1250 will go to his pension account every month.
The pensionable salary of any employee is his average monthly salary for the last 60 months before exiting the EPS. Even if you have not contributed to the EPS account for a few days in the last 60 months of employment, the benefit of those days will still be given to the employee.
This is the formula for pension
- Employee’s monthly pension = Pensionable salary
- Pension on 20 years of service
- If someone’s monthly salary (average salary of last 60 months) is Rs 15 thousand and the tenure of job is 20 years then….
Monthly Pension: 15000X 20/70 = Rs 4286
Pension after 25 years of service
- Monthly pension: 15000X 25/70 = Rs 5357
- Pension after 30 years of service
- Monthly Pension: 15000X 30/70 = Rs 6429
On death of employee
- The family of the employee can get pension benefits in these cases.
- In case of death of the employee while on the job and the employer/company deposits the money in the EPS account of that employee for at least one month.
- If the employee has worked for 10 years, but dies before attaining the age of 58 years.
- In case of death of the employee after the commencement of monthly pension.
