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EPFO Pension: Those working in the private sector are provided pension facility by EPFO after retirement. Employee Pension Scheme i.e. EPS is a retirement scheme managed by EPFO. 12% of Basic + DA of employees working in the organized sector is deposited in EPF every month. The same amount is also deposited by the employer/company. But the employer/company's share is divided into two parts. 8.33% goes to the Employee Pension Scheme (EPS) and 3.67% goes to EPF every month.
However, to avail this pension facility under EPS, it is necessary to contribute to EPS for at least 10 years, that is, the employee should have worked for 10 years. The maximum pensionable service is 35 years. Let us tell you the formula through which you can calculate how much pension you will get after retirement?
Understand the pension formula
The calculation of how much pension you will get in EPS is based on a formula. This formula is- EPS= Average Salary x Pensionable Service/ 70. Here average salary means basic salary + DA. Which is calculated on the basis of last 12 months. The maximum pensionable service is 35 years. The maximum pensionable salary is Rs 15,000. Because of this, the maximum pension part is 15000×8.33= Rs 1250 per month. In such a situation, if we understand the EPS pension calculation on the basis of maximum contribution and years of service, then- EPS= 15000 x35/70 = Rs 7,500 per month. In this way, the maximum pension from EPS can be Rs 7,500 and the minimum pension can be up to Rs 1,000. You can also calculate your pension amount through this formula.
Remember here that this formula of EPS will be applicable to employees working in the organized sector after 15 November 1995. There are different rules for employees before this. On the other hand, there is a constant demand from the employee organizations that the maximum limit of average salary for pension should be increased considering the current salary structure and inflation rate.
Also know this rule related to pension
Let us tell you that under the rules of EPS, the employee is entitled to get pension at the age of 58. However, if he wants, he can get pension even before 58. There is also an option of early pension for this, under which pension can be received after 50 years. But in such a situation, the sooner you withdraw money from the age of 58, the pension you get will decrease by 4 percent every year. Suppose you withdraw monthly pension at the age of 56, then you will be given 92 percent of the basic pension amount as pension. If you start taking pension at the age of 60 instead of 58, then you will get 8 percent more money than the normal pension amount as pension. In this, the pension will increase by 4 percent every year.