If this capping on the Employee Pension Scheme (EPS) is removed, then there will be a big benefit in the pension scheme.
Employees can get good news in the new year 2022. There is news that under the Employee Pension Scheme, the amount of pension of employees can be increased in the new year. According to media reports, if the camping on EPS is removed. If so, you will get a benefit of more than Rs 7,500 in pension. This means that if the basic salary of an employee is 20 thousand, then the benefit of 8 thousand more pension will be available i.e. EPFO will get the benefit of Rs 8517. At present, this matter is going on in the Supreme Court and it is expected to be decided soon.
Actually, in the present structure, there is a ceiling or capping of Rs 15000 per month for pension under the EPS scheme. If this capping on the Employee Pension Scheme (EPS) is removed, then there will be a big benefit in the pension scheme. Since the Provident Fund is a member of the Provident Organization (EPFO), then he also becomes a member of EPS. At present, hearing in this matter is going on in the Supreme Court and it is expected that a decision can be taken soon. If the limit is removed, there will be a significant increase in pension. This will benefit 6.5 crore employees.
Explain that under the Employee Pension Scheme (Employee Pension Scheme Update), 12% of the salary from the employee’s account is PF and later the same amount is deposited in the employer’s account. The contribution of basic salary in EPS is 8.33%. In this, the limit of pensionable salary is 15000, in such a case, only Rs 1250 is deposited in the pension fund every month. If the same salary is Rs 10,000, then only Rs 833 will be deposited. If the ceiling is removed, it can be increased to Rs 25000, in which case the amount deposited in the pension fund can also increase and pensioners can get a huge amount after retirement.
Understand the whole math like this
For example, if the maximum pension salary of an employee on retirement is Rs 15000, then according to the rules of EPS, after retirement he gets only Rs 7500 as pension. If the limit of 15000 is abolished from pension and basic salary 20000, then the pension amount will be more than 7500 i.e. 8,571. The same will increase in the salary of 25000 and 30000, for this you can check with the formula of EPS calculation = Monthly Pension = (Pensionable Salary x EPS Contribution), But for this, the contribution of the employer to the EPS will also have to be increased, so that the pension amount can be received at the time of retirement.
Here are its rules
- EPS member mandatory and minimum 10 years regular job.
- Option to take pension even after 50 years. For this you have to fill 10D form.
- Pension to the family on the death of the employee.
- If the service history is less than 10 years, then they will get the option to withdraw the pension amount at the age of 58 years
- The members of the Provident Fund Organization also become the members of the EPS.
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