If you do a private job then you are also entitled to pension. This pension is given to you under EPS of EPFO. PF is deducted to employees working in private and PSU. In this, some contribution of both the employee and the employer is deposited and after retirement you get a fund and after 58 years you will start getting pension under EPS.
The EPS scheme of EPFO (Employees’ Provident Fund Organization) is designed to provide regular monthly pension after retirement to employees working in the private sector. If you work for 15 years and your PF is deducted, how much pension will you get? Today we will understand its calculation.
What is Employee Pension Scheme? What is Employees Pension Scheme
“Employees’ Pension Scheme” launched on 16 November 1995 is a social security initiative of the Government of India, implemented under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. This plan provides financial security to employees after retirement, in case of disability, or to their families in case of death.
This pension scheme gives pension to those employees who are members of EPFO and who have contributed to the EPS account. After the death of the employee, the pension continues to be received by the nominee. Employees do not contribute to the EPS account. The employer’s contribution is 8.33% of the employee’s salary (Basic + Dearness Allowance). Under this scheme, the employee gets pension after the age of 58 years.
EPS Pension Calculation. EPS Pension Calculation
EPF pension for 15 years of service is calculated using this formula: Monthly pension = (Pensionable salary × Pensionable service) / 70.
Suppose the maximum pensionable salary is ₹ 15,000 per month and service is 15 years, then the calculation will be something like this.
Pensionable salary = ₹15,000
Pensionable service = 15 years
Monthly pension = (₹15,000 × 15) / 70
Monthly pension = ₹225,000 / 70
Monthly Pension ≈ ₹3,214 per month
If your service period is more then you will get more pension. You can calculate it according to your service period.