This amount may thus go a long way in providing great provision and amount during retirement but can also provide pension to you on an individual basis if you happen to be getting a salary, contributing to the EPFO every month. The employees are hence entitled to the regular pension facility after retirement under the Employee Pension Scheme (EPS). Here, however, a terminology has not been exhausted for the pension to be known and which things have to be fulfilled to be availed of such contributions or maximum EPFO pension.
First, understand how much is the contribution in EPF and EPS
All employees working in a secured job in the organized sector bring home a salary and add their 12 percent of the Basic plus DA to the EPF each month. The employer/company also deducts the same from the salary of the employee every month. But the share of the employer/company is bifurcated into two portions; 8.33 percent goes to Employee Pension Scheme, EPS, and 3.67 percent is deposited every month.
These conditions have to be fulfilled to get pension
It is the rule of EPFO that for getting any pension facility the contribution towards EPS should be minimum for 10 years, that is working for the employee 10 years. At the same time, the maximum pensionable service permissible is 35 years. Know in the next slides how much maximum pension you can receive after working for 35 years and contributing to EPS, and which formula is used for calculating this pension.
Understand how pension is calculated?
The amount of pension an individual is entitled to under EPS is determined by a certain formula. This formula can be given as EPS= Average Salary x Pensionable Service/ 70. Here average salary means basic salary + DA. This is calculated for the last 12 months. Maximum pensionable service is 35 years. The maximum pensionable salary is Rs 15 thousand. It makes 15000×8.33= 1250 rupees per month as the maximum pension amount.
How much will be the maximum pension based on the formula?
How well should we understand that maximum EPS pension can be construed- EPS= 15000 x35 / 70 = 7,500 rupees a month. So, the maximum that can be drawn from EPS is Rs 7,500, while the minimum can go as low as 1,000 rupees. Using this formula, you can also calculate your pension amount.
Keep this thing in mind in the case of pension
This formula for EPS applies to those employees from 15 November 1995. For others, there are different sets of rules.
Also, know this rule related to pension
According to EPS rules, one will get a pension of 58 years. However, he may choose to get an early pension before the age of 58. For this option,n an early pension can be taken after attaining the age of 50 years. But here, the earlier drawn age at which money is withdrawn before 58 years would have less pension at 4 percent for every year.
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