EPS Pension Calculation: After completing 10 years of service, any employee becomes eligible for pension under EPS. Apart from this, pension can also be taken by taking early retirement at the age of 50 years.
EPS Pension: Be it public sector or private sector, another thing that worries every employed person along with salary is pension after retirement. Everyone has the same question in their mind that how much pension will be received every month after retirement? Today we will tell you that if your basic salary is Rs 50,000 monthly, then how much pension can you get after 20, 25 and 30 years of service under EPS.
What is EPS?
EPS i.e. Employee Pension Scheme is a government scheme, which has been created to provide regular income to the employees of the organized sector after retirement. For this, it is necessary to have an EPFO ​​account. In this account, you and your company deposit 12% of your basic salary. Some of this money goes to your EPS account. Pension is given after retirement from this fund.
After completing 10 years of service, any employee becomes eligible for pension under EPS. Apart from this, pension can also be taken by taking early retirement at the age of 50, but with a lesser amount. At the same time, age of 58 years is required for regular pension.
How does EPS work?
When both you and your employer deposit 12-12 percent in the EPFO ​​fund, then the 12 percent given by the employer is divided into two parts. 8.33 percent goes to the Employee Pension Scheme (EPS) while 3.67 percent goes to the Employee Provident Fund (EPF). Pension is given after retirement from this EPS fund.
However, pension calculation in EPS is done with a special formula and there is also a limit in it. Under this, even if your basic salary is ₹ 50,000, the calculation in EPS is done on a maximum salary of ₹ 15,000. That is, even if your basic salary is ₹ 60,000, the pension calculation will be done on ₹ 15,000 only.
How is EPS pension calculated?
EPS pension is calculated using the formula (pensionable salary × service period) ÷ 70. Here pensionable salary means the average basic salary of the last 12 months + DA (maximum ₹ 15,000 is considered) and service period means how many years you have worked.
How much EPS pension will you get after 20, 25 and 30 years of service on a basic salary of 50,000?
– Even though your basic salary is Rs 50,000, but due to the limit, your pension calculation will be at Rs 15,000. Therefore
- Pension on 20 years of service: (15,000 x 20)/70 = Rs 4,285 per month
- Pension on 25 years of service: (15,000 x 25)/70 = Rs 5,357 per month
- Pension on 30 years of service: (15,000 x 30)/70 = Rs 6,428 per month
Apart from this, the maximum pension under EPS is Rs 7,500 and the minimum is Rs 1,000 per month. At the same time, if the employee dies, the EPS nominee gets the pension. Employees can make their wife, children or parents as nominees. If there is no family, then any trusted person can also be made a nominee.
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