Calculate Your Pension Here After 10 Years in the Private Sector

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Calculate Your Pension Here After 10 Years in the Private Sector

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Introduced on November 16, 1995, the Employees’ Pension Scheme (EPS) aims to provide a reliable income to employees in the organized sector after retirement. Managed by the Employees’ Provident Fund Organisation (EPFO), the EPS offers financial security for members by offering monthly pensions, including support for families in the event of the member’s passing, and disability benefits.

Key Features of the EPS Scheme:

  • Consistent Income: Provides a reliable monthly pension, ensuring financial stability for members post-retirement.
  • Family Support: Offers pension benefits to the family members of the deceased member.
  • Disability Assistance: Provides financial support for members suffering from permanent disabilities.
  • Tax Benefits: EPS pensions are exempt from income tax, making it an attractive savings option for retirement planning.

The EPS scheme replaced the Employees’ Family Pension Scheme of 1971, broadening its scope to offer benefits not only after death but also during retirement or disability.

Eligibility for EPS Pension:

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To qualify for the EPS pension, members must meet the following criteria:

  • At least 10 years of service.
  • Minimum age of 58 years.
  • Registered member of EPFO, with consistent contributions to the EPS scheme.

How the Scheme Works:

When an individual starts working with a company in the organized sector, they are automatically enrolled in the EPFO. A percentage of their monthly salary is deducted and contributed towards the Employees’ Provident Fund (EPF) and the EPS accounts. EPF members contribute 12% of their basic salary, with the employer matching this amount. Of the employer’s contribution, 8.33% is allocated to EPS.

Pension Calculation:

The monthly pension is calculated using the following formula: Monthly Pension = (Pensionable Salary × Pensionable Service) / 70

The pensionable salary is the average salary over the last 60 months, capped at Rs 15,000. The pensionable service refers to the total years of service contributed to EPS. For example, an employee earning Rs 15,000 with 10 years of service would be eligible for a monthly pension of Rs 2,143.

Pension Calculator and Access:

To calculate your pension, EPFO members can visit the official EPFO website (www.epfindia.gov.in), navigate to the “Online Services” section, and select the “EDLI and Pension Calculator.” The calculator will help estimate the pension based on individual service and salary details.

Additional Benefits and Deferral:

Members who have completed 20 or more years of pensionable service are eligible for an additional 2-year bonus. Moreover, members can postpone their pension benefits until the age of 60. Deferring the pension until age 59 results in a 4% increase in benefits, and a postponement until age 60 results in an 8% increase in benefits. Those continuing to work beyond 58 years and contributing to the pension fund can benefit from increased pension amounts based on extended service and salary.

The EPS scheme, with its comprehensive benefits, provides EPFO members a stable financial future and ensures support for families during unforeseen circumstances, making it an integral part of retirement planning for millions across India.

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