Under the Employees’ Pension Scheme (EPF), now the pensionable salary of the employees will also increase, that is, there will be a change in the basis on which the pension is calculated.
According to the current rules, the maximum limit of pensionable salary under the EPS Pension Fund is Rs 15,000.
EPS-95 Pension Hike
The pension salary of any employee is from his average monthly salary of the last 60 months before the exiting the Employees’ Pension Scheme.
Now the government has also developed a higher pension scheme, under which this EPS pension fund limit will be increased.
Many labor unions have demanded to increase it to Rs 25000, which the Finance Ministry is considering. If this happens, your monthly pension will increase.
Employees’ Pension Scheme also gives pensions to those doing private jobs
If you are in a private job, money is deducted from your Provident Fund (PF) and you have worked for 10 years, then you are also entitled to get a pension.
A part of the amount deposited in your Provident Fund account goes to the pension fund in the Employees’ Pension Scheme.
Employees’ Pension Scheme is a pension scheme, which is managed by EPFO! EPS pension was started in the year 1995.
It is for employees working in the organized sector! You will get the benefit of this scheme only if your job tenure is at least 10 years! You will start getting this pension after completing the age of 58 years.
Pension on basic salary of Rs 25000
Suppose you started the job at the age of 23 and you are retiring at the age of 58. That is, you have worked for a total of 35 years.
If your maximum basic salary before exiting the EPS pension (pension fund) in the last 60 months is considered to be Rs 25,000, then the pension will be calculated on this only.
The provided pension salary of any employee is from his average monthly salary from the last 60 months before the exiting the Employees’ Pension Scheme.
Currently, it is capped at Rs 15,000! Under the Higher Pension Scheme, it can be increased to Rs 25,000.
Monthly pension- 25,000X 35/70 = Rs 12,500
The point to note here is that your basic salary at the time of retirement can be higher, but just like the current capping is Rs 15,000, similarly, going forward, Rs 25,000 will be considered as the maximum limit.
What is the maximum pension on current rules
About EPS pension (pension fund), suppose you started the job at the age of 23 and you are retiring at the age of 58. This means that your job period was 35 years. Under the old pension scheme, the pensionable salary has been considered as Rs 15,000.
Monthly pension = Pensionable salary X Pensionable service /70.
Monthly pension: 15,000X 33/70 = Rs 7500
How is the contribution made to EPS
Talking about the present time, in the EPS pension (pension fund), every month 12 percent of the employee’s basic salary + DA is deposited in the EPF account.
The employer’s contribution is also 12 percent. Out of the basic contribution made by the company, 8.33 percent goes to the Employee Pension Fund (EPS) and the other remaining 3.67 percent goes to directly the PF account.
According to the current rules of the Employees’ Pension Scheme, the maximum limit of pensionable salary is Rs 15 thousand! In such a situation, 15000X 8.33/100 = Rs 1250 will go to his pension account every month.