EPFO Pension Calculator: The Employee Provident Fund Organization (EPFO) runs the Employee Pension Scheme (EPS) to benefit employees. It is one of India’s largest social security programs. Under this scheme, employees receive a monthly pension based on their years of service and salary. EPS was launched on November 16, 1995, to provide regular income to organized sector employees after retirement. Throughout this article, we will share the new EPF calculation formula to help you understand how much pension you will get after 10 years of service.
Key Features of EPS
- Minimum Service Requirement: To receive a pension under EPS, an employee must work for at least 10 years as an EPF member.
- Minimum Monthly Pension: Rs 1,000
- Maximum Monthly Pension: Rs 7,500
Eligibility Criteria for EPS
To receive a pension under EPS, employees must meet the following conditions:
- They must have worked for at least 10 years.
- They must be at least 58 years old to claim the pension.
- They should be registered members of EPFO.
- They must have continuously contributed to EPS during their service.
EPF Contributions and Pension Fund
- Employee Contribution: 12% of basic salary goes to the Provident Fund (PF).
- Employer Contribution: 12% of the basic salary is contributed by the company, divided as follows:
- 8.33% to the Employee Pension Scheme (EPS).
- 3.67% to the Provident Fund (PF).
Since 2014, the government has set the minimum pension at Rs 1,000 per month under EPS-1995. However, there has been a long-standing demand to increase it to Rs 7,500 per month.
New EPS Pension Calculation Formula
To calculate the monthly pension, the following formula is used:
Monthly Pension = (Pensionable Salary × Pensionable Service) / 70
- Pensionable Salary: Average salary of the last 60 months.
- Pensionable Service: The total number of years an employee contributed to EPS.
Example:
If an employee’s pensionable salary is Rs 15,000 and their pensionable service is 10 years:
Monthly Pension = (Rs 15,000 × 10) / 70 = Rs 2,143
Working more years increases the pension amount.
Types of EPS Pension
- Superannuation Pension: Given upon completing 58 years of age.
- Early Pension: Employees fulfilling pension criteria can claim an early pension after the age of 50, but the amount is reduced.
- Widow Pension: Provided to the spouse if the EPFO member passes away.
- Child Pension: Given to two children of the deceased member until they turn 25.
- Orphan Pension: If both parents pass away, two children below 25 years receive this pension.
- Disability Pension: If a member becomes permanently disabled, they can receive a pension without the 10-year service condition.
Early Pension Option
Employees can opt for an Early Pension before 58 years if:
- They are at least 50 years old.
- They have completed 10 years of service.
- However, the pension is reduced by 4% for each year before 58.
Ways to Increase EPS Pension
- Work for More Years: A longer service period increases the pension amount.
- Higher Salary: A higher pensionable salary leads to a better pension.
- Regular Contributions: Consistent contributions ensure better pension benefits.
- Higher Pension Scheme: If eligible, opting for the Higher Pension Scheme can increase monthly pension payments.