EPS Pension Calculation: Rs 52,000 basic salary, 25 years of service, find out your monthly pension
As an EPF member, you are automatically enrolled in the Employee Pension Scheme (EPS), a retirement plan for organized sector workers. Both you and your employer contribute to the EPF, with a portion of the employer's contribution going towards EPS, helping you build a retirement fund and providing a pension after retirement.
The Employee Pension Scheme (EPS) is a government-backed retirement plan providing a fixed income after retirement, starting at age 58 or early retirement at 50. Based on a basic salary of Rs 52,000 and 25 years of service, we can calculate your monthly pension according to EPS rules, ensuring a steady income for you and your family.
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(Disclaimer: Our calculations are projections and not investment advice. Do you own 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 years 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 are minimum and maximum EPS amounts?
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, 25 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 52,000, their EPS pension will be calculated at Rs 15,000 salary. Individuals may get about Rs 5,357 as a pension if the service is 25 years. (Pensionable Salary X Pensionable Service)/70 = (15,000x25)/70 = Rs 5,357.