EPFO: Employees working in the private sector often harbor a fear about financial security in old age. But if your Provident Fund (PF) is being deducted, you don't need to worry. The Employees' Pension Scheme (EPS) of the Employees' Provident Fund Organization (EPFO) is a boon for private sector employees. If you are planning to retire in the next few years, say in 2030, we will tell you exactly how much pension you will receive every month after retirement.

The Money Deducted from Your Salary Becomes Your Support in Old Age
First, it's important to understand where the pension money comes from. When PF money is deducted from your salary every month, a part of it is deposited into your Employees' Provident Fund (EPF), and another part is contributed by the company. A large portion of the company's contribution goes into the Employees' Pension Scheme (EPS).

This accumulated capital later takes the form of a pension. However, there are some conditions. To be eligible for a pension, you must have at least 10 years of service (pensionable service). Full pension is usually received at the age of 58, but if someone wishes, they can start receiving a reduced pension from the age of 50.

Check Your Passbook and Calculate Accordingly
The pension calculation formula may sound complicated, but it is very straightforward. The formula determined by EPFO is: (Pensionable Salary × Total Years of Service) / 70

It is important to note here that for pension calculation, your maximum salary limit (Basic Salary + DA) is considered to be Rs. 15,000 per month. This means that even if your basic salary is more than this, the calculation will still be based on Rs. 15,000. Years of service mean the number of years you have contributed to EPS.

How much will the amount be upon retirement in 2030?
Let's understand this entire calculation with a simple example. Let's say there's an employee named Kanhaiya, who is scheduled to retire in 2030. By then, he will have completed 25 years of service. Since the maximum salary for pension calculation is fixed at ₹15,000, Kanhaiya's pension will be calculated as follows: ₹15,000 (salary) × 25 (years) ÷ 70 = ₹5,357 (approximately).

According to this calculation, Kanhaiya will receive a pension of approximately ₹5,357 every month after retirement. There's another catch: if Kanhaiya doesn't wait until age 58 and starts receiving his pension at age 50, he will receive 4% less pension each year. Conversely, if he postpones receiving his pension until age 60 instead of 58, his pension amount will increase.

The government provides important information in Parliament.
The government is also continuously active regarding pensions. Recently, in Parliament, Minister of State for Labour and Employment, Shobha Karandlaje, informed that EPFO has processed approximately 99 percent of the applications received for 'higher pension'. The department is working rapidly in compliance with the Supreme Court's directives. The government also clarified that after the implementation of the new Social Security Code, contributions above the ₹15,000 salary limit will be voluntary, meaning it will depend on the wishes of both the employee and the company.

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