If you are employed and contribute to EPFO every month, then you must be aware of its Employee Pension Scheme. If you have contributed to EPFO for 10 years, then you become entitled to a pension after retirement. How much pension you will get is decided by a formula. In this, the total period of your job is also taken into account. The maximum pensionable service is 35 years. If you are also an EPFO member, then know here the formula through which you can also decide how much pension you will get after retirement.
Formula to calculate pension
The formula to calculate the pension received from EPFO is- EPS = Average Salary x Pensionable Service / 70. Here average salary means basic salary + DA. Which is calculated based on the last 12 months. The maximum pensionable service is 35 years. The maximum pensionable salary is Rs 15 thousand. This makes the maximum pension share 15000x8.33= 1250 rupees per month.
Maximum pension amount
If we understand EPS pension calculation on maximum contribution and years of service- EPS= 15000 x35 / 70 = 7,500 rupees per month. In this way, you can get a maximum pension of up to 7,500 rupees from EPS. At the same time, the minimum pension can be up to 1,000 rupees. You can also calculate your pension amount through this formula.
Let us tell you that 12 percent of Basic + DA of employees working in the organized sector is deposited in EPF every month. The same amount is also deposited by the employer/company. However, the employer/company's share is divided into two parts. 8.33% goes to the Employee Pension Scheme (EPS) and 3.67% goes to EPF every month.
Understand these rules too.
Under the rules of EPS, the employee is entitled to a pension at the age of 58 years. However, if he wants, he can get a pension even before 58. For this, there is also an option of Early Pension, under which pension can be received after 50 years. But in this case, the earlier you withdraw money from the age of 58, the lesser will be your pension at the rate of 4 percent for every year.
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