EPS Pension Calculation: Rs 65,000 basic salary, 30 years of service, find out your monthly pension
In the Eps nomination, an account holder can choose a person to receive the pension benefits. Nominees can be family members, such as a spouse, children, or dependent parents. If the member has no family, they can nominate anyone. The Employee Pension Scheme (EPS) provides fixed income after retirement, with two possible scenarios: you can receive a pension at the age of 58 or opt for early retirement at 50.
The Employee Pension Scheme (EPS) is a retirement-centric plan that provides a monthly pension to employees after they turn 58. Both the employee and employer contribute 12 per cent of the basic salary to the Employees' Provident Fund (EPF), with 8.33 per cent of the employer's share allocated to the EPS, which accumulates over time to determine the retirement pension. On that note, let’s find out what your monthly pension will be with Rs 65,000 as basic salary, & 30 years of service.
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What is Employee Pension Scheme (EPS)?
As an EPF member, you're automatically enrolled in the Employee Pension Scheme (EPS), a government-backed retirement plan designed for organised sector workers. Here's how it works: both you and your employer contribute 12 per cent of your basic salary to a fund, with a portion of that allocation going towards EPS, providing a safety net for your golden years.
Who is eligible for EPS?
To be eligible for the Employee Pension Scheme (EPS), you must meet certain criteria. Firstly, you should have attained the age of 50 for an early pension or 58 for a regular pension. Additionally, you must be a registered member of the Employees' Provident Fund Organisation (EPFO) and have completed a minimum of 10 years of service.
How does Employee Pension Scheme (EPS) contribution work?
When it comes to building your retirement corpus, you're not alone - your employer contributes to it too. Here's the breakdown: both you and your employer contribute 12 per cent of your basic salary to a fund. However, your employer's 12 per cent contribution is divided into two parts: 8.33 per cent goes to the Employee Pension Scheme (EPS) to secure your pension, while 3.67 per cent goes into the Employees' Provident Fund (EPF) to build your provident fund.
What are benefits of EPS?
The Employee Pension Scheme (EPS) provides fixed income after retirement, either you can receive a pension at the age of 58 or opt for early retirement at 50.
If you leave service 10 years before turning 58, you have the option to withdraw the entire pension amount at the age of 58, providing a lump-sum benefit.
What is EPS nomination?
Eps nomination is a method in which the account holder can choose a person to receive the pension benefits from EPS. Nominees can be family members, such as a spouse, children, or dependent parents. If the member has no family, they can nominate anyone.
Under the Employee Pension Scheme, are employees the only beneficiaries 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
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.
Rs 65,000 as basic salary and 30 year service period
This Rs 65,000 basic salary includes Dearness allowance. Note that the Cabinet approved a 2 per cent increase in Dearness Allowance for central government employees, raising it from 53 per cent to 55 per cent.
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 65,000, their EPS pension will be calculated at the wage ceiling, which is Rs 15,000. 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.