Private Job Pension Rules: After retirement, life depends on pension. Everyone talks about the pension of government employees, but what about private employees? If you also work in a private job, today we’ll tell you how much pension you’ll receive after retirement. Let’s find out.
How to get pension in private job?
If you work in a private job, your PF is deducted. A portion of that PF goes towards your pension. The Employee Pension
EPS considers your pension eligibility based on the average of your basic salary and DA for the last 12 months, but the maximum salary considered is Rs 15,000, even if your actual salary is higher. You must have worked for at least 10 years to receive the pension. The retirement age is 58 years.
The formula for calculating pension is very simple:
Pension = (Pensionable salary × Years of service) ÷ 70
For example, if your pensionable salary is Rs 15,000 and you worked for 25 years, your pension will be: (15,000 × 25) ÷ 70 = Rs 5,357 per month. However, remember that Rs 5,000 now will be insufficient to live on when you retire. Therefore, it’s best to invest in options like NPS, mutual funds, or company pension plans now.
When should one take pension, 58 or 60?
Private sector employees in India receive pension benefits only if they are enrolled in the EPF and have completed at least 10 years of service. Under this scheme, regular pension begins at age 58, while a reduced pension option is also available starting at age 50. If an employee defers retirement until age 60, they can receive an increased pension at an additional 4% annual rate.
