EPS Pension Calculation: Rs 78,000, basic salary, 18, 25, and 30 years of service, find out your monthly pension
An employee is entitled to receive a pension only after completion of a minimum of 10 years of eligible service. The minimum monthly pension an eligible employee will receive from EPS is Rs 1,000.
Both employees and employers contribute 12 per cent of the employee's basic salary to the EPF, with 8.33 per cent of the employer's share going to the EPS. Employee Pension Scheme provides a fixed income after retirement at the age of 58 years and early retirement at 50 years of age. We will walk you through the article to help you find out your monthly pension with Rs 78,000 as basic salary and 18, 25 & 30 years of service.
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What are eligibility criteria for Employee Pension Scheme (EPS)?
Those who have attained the age of 50 years for early pension and 58 years for regular pension.
You must be a member of the EPFO.
You must have completed 10 years of service.
What is minimum EPS pension?
The minimum monthly pension that you will receive from EPS is Rs 1,000.
Years of service needed for EPS pension?
An employee is entitled to receive a pension only after completion of a minimum of 10 years of eligible service.
How does EPS contribution work?
When it comes to saving for retirement, both you and your employer contribute to it. Here's how it works: You and your employer each put 12 per cent of your basic salary into a fund.
Your employer's 12 per cent is split into two parts: 8.33 per cent goes into the Employee Pension Scheme (EPS) and 3.67 per cent goes into the Employees' Provident Fund (EPF).
Who is covered under EPS?
The benefit of the EPS is paid to the employee and, in his or her absence, to the family of the employee.
Can EPS nomination be changed?
Yes, a member of the EPS can change his or her nomination according to the rules for such nomination. It simply means that the nominee should be a family member of the employee. Only if the employee has no family, then he or she can nominate anyone else according to their wish.
What happens to EPS when you switch jobs?
When you change jobs, your EPF (Employee Provident Fund) amount can be transferred to your new account. However, your EPS (Employee Pension Scheme) amount stays in the old account and can't be transferred. Your service details are linked, so your total work years can be tracked. This means your EPF accounts can be combined, but your EPS amounts will remain separate in different passbooks.
EPS calculation conditions
The formula for calculating the EPS pension is:
Monthly pension amount = (Pensionable Salary x Pensionable Service) / 70.
Monthly Pension Calculation: Pensionable service, 18, 25, & 30 years
The monthly pension amount you will receive will depend on your pensionable salary and service. The average salary used in the formula is the average of your basic salary plus your DA for the last 12 months.
Pension Calculation
Contributing to the (present) wage ceiling of Rs 15,000. According to the rule, even if someone's basic salary and dearness allowance is Rs 78,000, their EPS pension will be calculated at Rs 15,000 salary.
What will be your monthly pension with 18 years of service?
(Pensionable Salary X Pensionable Service)/70 = (15,000x18)/70 = Rs 3,857.
Individuals may get around Rs 3,857 as a pension for their service period of 18 years.
What will be your monthly pension with 25 years of service?
(Pensionable Salary X Pensionable Service)/70 = (15,000x25)/70 = Rs 5,357.
Individuals may get Rs 5,357 as a pension if the service is 25 years.
What will be your monthly pension with 30 years of service?
(Pensionable Salary X Pensionable Service)/70 = (15,000x30)/70 = Rs 6,428.
Individuals may get around Rs 6,428 as a pension for their service of 30 years.