look news india
In ‘Paison Ki Pathshala’, personal finance expert Pankaj Mathpal told that if the wage ceiling (salary limit) of Employee Pension Scheme (EPS) is ₹ 25,000, your pension will increase significantly. However, the exact amount of pension depends on the formula of your years of pensionable service, your retirement age and last pensionable salary. But, according to the increase in monthly contribution, you can easily see a benefit of at least 20% in your pension in the long run.
Actually, personal finance expert Pankaj Mathpal was asked that how much difference can this new ceiling of EPS of Rs 25,000 make to the pension? So on this he said that the exact amount of pension depends on the formula of your years of pensionable service, retirement age and final salary.
What is the formula?
If you explain in detail, the expert said that how much difference will it make on pension, actually there is a formula for it and according to how many years you serve, how much money gets added to you in the end? Yes, how many years of pensionable service and what is the pensionable service age? So according to that you calculate and find out how much it is.
How much will pension be affected?
The expert further said that actually if we are seeing here that earlier the contribution was around ₹ 1250 and now what is happening is around ₹ 2082, then your contribution here is around ₹ 750 or ₹ 800… or let us say ₹ 800… then at least the minimum profit is visible here.
Not only this, while clarifying further, he explained that it will be very difficult to say how much benefit you will actually get because it will depend on how many years of service you have had in so many years. But at least according to me, you should get benefit of around 20% in pension in long term compared to what we were getting earlier, so this is what we can expect.
| main changes | EPS wage ceiling i.e. salary limit to be ₹ 25,000 |
| Change in monthly contribution | Earlier the maximum deposit was ₹1,250 per month, which will now increase to approximately ₹2,082 per month (₹800 more per month). |
| factors determining pension | Formula of total pensionable service years, retirement age and last pensionable salary |
| estimated profit | Expected to get at least 20% increase in long term compared to old pension. |
| key findings | The new rule will increase the scope of monthly pension received after retirement and strengthen the economic security of old age. |
Work on expert input
In simple words, if the EPS limit is increased to Rs 25,000, then its direct benefit will be on your old age support i.e. your pension. Even though the exact pension will depend on each person’s total years of service and retirement age, one thing is certain that you can expect to get at least 20% more pension than your old pension. That means, in the long term, this change will make your retirement life more secure.