EPS Pension Calculation: Rs 50,000 basic salary, 30 years of service, find out your monthly pension
If you're an EPF member, you automatically become a part of EPS. The Employee Pension Scheme (EPS) is a retirement plan for working people in organised sectors. Both you and your employer put 12 per cent of your basic salary into a special fund called the EPF.
The Employee Pension Scheme (EPS) is a retirement plan, backed by the government. It provides fixed income to an employee after retirement at the age of 58 years or after early retirement at 50 years. The benefit of the EPS is paid to the employee or the family of the employee, in his or her absence. Thus, let’s find out your monthly pension, with Rs 50,000 as your basic salary and 30 years of service.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
What is Employee Pension Scheme?
The Employee Pension Scheme (EPS) is a retirement-based plan for working people in organised sectors. If you have a Provident Fund (EPF) account, you are also part of the Employee Pension Scheme (EPS). This means your money is safe and guaranteed by the government.
How Employee Pension Scheme work?
Here's how it works. You and your employer each contribute 12 per cent of your basic salary to a fund. Some of this money goes into your EPS account.
Who is Eligible for Employee Pension Scheme (EPS)?
Those who have attained the age of 50 years for early pension and 58 for regular pension.
You must be a member of the EPFO.
You must have completed 10 years of service.
How do EPS contributions 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).
Benefits of Employee Pension Scheme (EPS)
The Employee Pension Scheme (EPS) provides a steady income after retirement at 58 years old. You can also opt for early retirement at 50 years old and still receive benefits. Plus, if you leave your job 10 years before turning 58, you have the option to withdraw your entire pension amount at 58.
EPS Nomination: How to nominate beneficiary
EPS nomination lets you choose who will receive your pension benefits if something happens to you. You can nominate family members like your spouse, kids, or parents. If you don't have family, you can choose anyone.
Under the Employee Pension Scheme, are employees the only beneficiary of the fund?
The benefit of the EPS is paid to the employee or the family of the employee, in his or her absence.
What is minimum and maximum EPS amount?
The minimum monthly pension that you will receive is Rs 1,000, and the maximum is Rs 7,500.
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, 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.
What will be your monthly pension?
Contributing to the (present) wage ceiling of Rs 15,000. Even if someone's basic salary and dearness allowance is Rs 50,000, their EPS pension will be calculated at Rs 15,000 salary. Individuals may get about Rs 6,429 as a pension if the service is 30 years. (Pensionable Salary X Pensionable Service)/70 = (15,000x30)/70 = Rs 6,429.