Employee Pension Scheme: The cap on investment under the Employee Pension Scheme (EPS) can be removed soon. The hearing in this regard is now going on in the Supreme Court. It is being told that a decision can be taken on this soon. But what does this hearing and this matter have to do with you and how it will affect your life, we explain to you.
What is the matter of removal of EPS limit Before proceeding on this matter, let us understand what is this whole matter. At present, the maximum pensionable salary is limited to Rs 15,000 per month. Meaning, whatever your salary may be, but the calculation of pension will be only on Rs 15,000. The matter is going on in the court to remove this limit.
On August 12 last year, the Supreme Court had adjourned the hearing of a batch of petitions filed by the Union of India and the Employees’ Provident Fund Organization (EPFO), which said that the pension of employees cannot be limited to Rs 15,000. . The hearing of these cases is going on in the court.
What are the rules regarding EPS now?
When we start working and become a member of EPF, then at the same time we also become a member of EPS. The employee gives 12% of his salary in EPF, the same amount is also given by his company, but a part of this 8.33 percent also goes to EPS. As we mentioned above that at present the maximum pensionable salary is only 15 thousand rupees, that means every month the pension share is maximum (8.33% of 15,000) Rs 1250.
Even when the employee retires, the maximum salary for calculating the pension is considered to be only Rs 15 thousand, according to this, the maximum pension an employee can get under EPS is Rs 7,500.
This is how pension is calculated
One thing must be noted that if you have started contributing to EPS before September 1, 2014, then the maximum limit of monthly salary for pension contribution for you will be Rs.6500. If you have joined EPS after September 1, 2014, then the maximum salary limit will be 15,000. Now see how pension is calculated.
EPS Calculation Formula
Monthly Pension = (Pensionable Salary x Years of EPS Contribution)/70
Here assuming the employee started contributing to EPS after 1st September, 2014, then the pension contribution would be Rs 15,000. Suppose he has worked for 30 years.
Monthly pension = 15,000X30/70 = Rs 6428
Maximum and Minimum Pension One more thing to remember that the employee’s service of 6 months or more will be considered as 1 year and if it is less then it will not be counted. Meaning if the employee has worked for 14 years 7 months, then it will be considered as 15 years.
But if you have worked for 14 years and 5 months, then only 14 years of service will be counted. The minimum pension amount under EPS is Rs 1000 per month, while the maximum pension is Rs 7500. 8,571 will get pension If the limit of 15 thousand is removed and your basic salary is 20 thousand rupees, then the pension you will get according to the formula will be this. (20,000 X 30)/70 = Rs 8,571.
Existing Conditions for Pension (EPS)
It is necessary to be an EPF member for pension.
It is mandatory to be in the job for at least 10 regular years.
Pension is available when the employee turns 58.
There is an option to take pension after 50 years and even before the age of 58.
Keep in mind that on taking the first pension, you will get the reduced pension and for this you will have to fill Form 10D.
On the death of the employee, the family gets pension.
If the service history is less than 10 years, then they will get the option to withdraw the pension amount at the age of 58 years.