EPS Pension: Are you also one of those lakhs of employees who deposit their money in EPF and expect a good pension after retirement.
A hearing is going on in the Supreme Court regarding EPS pension, due to which there can be a tremendous increase in the pension of lakhs of employees. Let us know how.
What is wrong with the EPS pension
Both the employee and the employer contribute to EPF i.e. Employees Provident Fund. A part of this goes to EPS i.e. Employee Pension Scheme, which provides pension after retirement.
But the problem is that the maximum limit of basic salary for calculating pension has been fixed at Rs 15,000. This means, that no matter how much your salary is, the pension will be calculated only at Rs 15,000.
There can be a huge increase in pension
Employees say that this rule is wrong and due to this, the pension is very low. He filed a petition in the Kerala High Court, in which the court ruled in his favour.
However, EPFO challenged this decision in the Supreme Court. Now the hearing of this case is going on in the Supreme Court. If the decision comes in favour of the employees, then the pension can increase significantly.
How is pension withdrawn
There is a formula for calculating pension: Service period x 15000 / 70. That is, if you have served for 30 years, then your pension will be (30 x 15000) / 70 = about 6429 rupees.
But this is when your salary is not more than Rs 15,000. If your salary is high and the court’s decision comes in your favour, then your pension will increase significantly.
What do the rules say
According to the rules of EPF, if you contribute to EPF continuously for 20 years, then you get 2 years of extra service benefit.
That is, if you have worked for 33 years, then the pension will be calculated for 35 years. But there is no difference in the amount of pension because the basic salary limit remains the same at Rs 15,000.
What will happen next
At present, the matter is in the Supreme Court. All the employees are waiting for this decision. It is expected that the decision on this matter will come soon. If the decision comes in favor of the employees, then it will benefit lakhs of employees.