Pension Calculation: This news is related to pensions for private employees. The minimum pension under the EPFO is ₹1,000, which is expected to be increased to ₹7,500. To receive a pension, it’s necessary to be an EPFO member and have made PF deductions for 10 years. Pension is calculated using a fixed formula, which includes pensionable salary and service.
New Delhi. Government employees receive a pension. But many people are unaware that private employees also receive a pension. If you hold a private job, this news may be useful to you. In this news, we’ll explain the minimum and maximum pension amounts in private jobs.
What is the minimum pension under the EPFO?
The minimum pension under the Employees’ Pension Scheme (EPS-95) under the EPFO is currently ₹1,000 per month. This was fixed in 2014 and has remained unchanged since then. The minimum pension under the Employees’ Pension Scheme (EPS-95) is expected to be increased to ₹7,500 from May 2025. This increase is intended to provide retired employees with a more livable pension and will include an inflation-linked dearness allowance (DA) component, which will be adjusted twice a year.
Will the pension increase?
The government will also increase the minimum pension under the EPFO. Work on this has already begun. Various employee organizations have long demanded that the amount of ₹1,000 is too low considering current inflation. Trade unions and various pensioners’ associations have long demanded an increase in the pension amount under the Employees’ Pension Scheme (EPS) to ₹7,500.
However, according to reports, the CBT will not increase the pension by 7.5 times and may consider increasing it by ₹2,500. However, it is not yet clear how much the increase will be. Different media reports are making different claims.
To receive a pension under the EPS, employees must fulfill the necessary conditions. For this, the employee must be an EPFO member and their PF must be deducted for at least 10 years. Pension benefits begin after the age of 58.
How is pension determined under EPFO?
Pension under EPS is calculated using a fixed formula: Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Pensionable Salary is the average basic pay + dearness allowance for the last 60 months of service, with a maximum limit of ₹15,000. Pensionable service represents the total years of service, rounded off if it is 6 months or more, and you need at least 10 years of service to be eligible for a pension.
The maximum limit for pensionable salary is ₹15,000 per month. This means that if a member has served for 35 years, they can receive a maximum pension of ₹7,500 per month.
