Stories
Pension Calculation: How Much Pension Will You Get After 15+ Years in One Private Company?
- •Government increased wage limit under EPF and EPS from Rs. 15,000 to Rs. 25,000 per month.
- •This decision could lead to a massive 66.6% increase in EPS pension if the new wage limit comes into effect.
- •Monthly pension is calculated using the EPFO formula: Monthly Pension = Pensionable Salary × Pensionable Service Period ÷ 70.
- •EPFO rules grant an additional 2 years of 'service bonus' for employees with 20 or more years of service.
- •With the new Rs. 25,000 limit, an employee with 22 years of service could see their monthly pension increase to Rs. 7,857, an additional Rs. 3,143.
Key Questions Answered
The government has increased the wage limit under the Employees' Provident Fund (EPF) and Employees' Pension Scheme (EPS) from Rs. 15,000 to Rs. 25,000 per month. If this new wage limit is implemented, it could lead to a massive 66.6% increase in the monthly pension received by employees after retirement.
To receive a monthly pension under the EPS, an employee must complete a minimum of 10 years of qualifying service and typically become eligible at the age of 58. Alternatively, members can choose to receive an early pension starting from the age of 50, though it will be reduced by a specific rate each year.
Monthly pension is calculated using the formula: Pensionable Salary × Pensionable Service Period ÷ 70. Furthermore, under EPFO rules, if an employee completes a continuous service period of 20 years or more, the government grants an additional 2 years as a 'service bonus' to boost the total calculated service period.
