For a long time, there is a constant discussion about the Employee Pension Scheme. Many things are coming out about the removal of the limit 15,000 on investment under the Employee Pension Scheme ie EPS.
The employees have high expectations from the court on this matter. How this matter is going to affect your life, today we are here to explain to you. First of all we have to understand that what is this whole matter? Till now the pensionable salary was only Rs 15,000 per month.
This means that no matter what the salary is, but the calculation of pension will be done only on Rs 15,000. The matter for its removal is pending in the court. On August 12, a petition was filed in the Supreme Court on behalf of the Union of India and the Employees’ Provident Fund Organization (EPFO). Let us know more about this scheme.
What is the rule for EPS now?
You should know that when you do a job and become a member of EPF, at the same time you also become a member of EPS. Under this, 12% of the employee’s salary goes to EPF, as well as an equal amount is also given by his company, but a part of this, ie 8.33 percent, also goes to EPS.
According to the pensionable salary being maximum Rs 15 thousand, the pension share every month is maximum (8.33% of 15,000) Rs 1250. At the same time, the maximum salary for calculation of pension even after the retirement of the employee is considered to be only 15 thousand rupees. According to this, an employee can get a maximum pension of Rs 7,500 under EPS.
This is how pension is calculated
The point to be kept in mind is that if you started contributing to EPS before September 1, 2014, then the monthly salary for pension would be maximum Rs.6500. Whereas for employees joining EPS after September 1, 2014, the maximum limit of salary will be Rs 15,000 only.
See here the formula for calculation of pension
- Its basic formula is Monthly Pension = (Pensionable Salary x Years of EPS Contribution) / 70
- Suppose the employee has joined EPS after September 1, 2014, and has served for 30 years. So his monthly pension,
- Monthly pension = 15,000X30/7 i.e. Rs 6428.
Maximum and Minimum Pension
Apart from this, there is another rule, if the employee has rendered 6 months or more service then it will be considered as one year and less than this, this year will not be counted. That is, if the employee has worked for ten years 7 months, then he will be considered as 11 years. But if you have done ten years and 5 months, then it will be counted as ten years only.
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