If you are eligible to receive pension from EPFO after retirement, then you can know how much pension you will get by using a simple formula. Know here the special things related to that formula and EPS pension?
EPFO Pension: Those doing private jobs are given pension facility by EPFO after retirement. Employee Pension Scheme i.e. EPS is a retirement scheme, which is managed by EPFO. 12 percent 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, contribution to EPS for a minimum of 10 years is necessary, that is, the employee must have worked for 10 years. At the same time, 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 done on the basis of 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. Maximum pensionable service is 35 years. Pensionable salary is maximum 15 thousand rupees. Due to this, the maximum pension part is 15000×8.33= 1250 rupees per month.
In such a situation, if we understand EPS pension calculation on the basis of maximum contribution and years of service, then- EPS= 15000 x35 / 70 = 7,500 rupees per month. In this way, the maximum pension from EPS can be up to 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 employee organizations that the maximum limit of average salary for pension should be increased in view of the current wage structure and inflation rate.
Know this rule related to pension as well
Let us tell you that under the rules of EPS, the employee is entitled to pension at the age of 58 years. However, if he wants, he can get pension even before 58. For this, there is also an option of Early Pension, under which pension can be received after 50 years. But in such a situation, the earlier you withdraw money from the age of 58, the pension you will get will be reduced by 4 percent for 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% more money as pension than the normal pension amount. In this, the pension will increase by 4% every year.
