EPS-95 Pension Calculation : The Employees Provident Fund Organization (EPFO) operates several schemes for the employees of the organized sector in the country, one of which is the Employees’ Pension Scheme ( EPS-95 Pension Fund ). Under this scheme, the employed employees get regular monthly pension after retirement. Let us understand the complete calculation of EPFO pension and how it works.
EPS-95 Pension Calculation
EPFO ( Employees Provident Fund Organization ) pension scheme has been created to provide financial security to the employees. By making regular contributions during the job and working for a long period, the amount of pension received after retirement can be increased. Due to early pension, widow pension and other facilities, this scheme proves to be very beneficial for the employees.
Special features of EPS-95 Pension Scheme
- To get EPFO pension, the employee has to work for at least 10 years.
- Under EPS-95 Pension Fund The minimum monthly pension can be Rs 1000 and the maximum can be up to Rs 7500.
- The pension is calculated on the basis of the average salary and service period of the employee for the last 60 months.
- Various types of pensions have been provided under the pension scheme, such as Widow Pension, Child Pension, Orphan Pension and Disability Pension.
Eligibility for EPFO Pension
To avail EPS Pension, the employee must fulfill certain conditions –
- The employee must have worked for at least 10 years.
- Employee must be at least 58 years old at the time of retirement.
- The employee must be a registered member of EPFO.
- To receive pension, the employee must have contributed regularly to EPS during his job.
EPS-95 Pension Calculation Formula
The following formula is used to calculate EPFO pension:
Monthly Pension Calculation Formula –
Monthly EPS-95 Pension Fund = (Pensionable Salary × Pensionable Service) / 70
- Pensionable Salary : Average salary of the last 60 months
- Pensionable Service : Total years of service served by the employee
Example of EPFO Pension
If an employee’s pensionable salary is Rs 15,000 and he has worked for 10 years, then his monthly pension will be:
Monthly Pension = (15,000 × 10) / 70 = Rs 2,143
That is, if an employee has worked for 10 years and is eligible for EPS, he will get a pension of Rs 2,143 every month.
Types of EPS-95 Pension
- Retirement Pension – EPFO members get this pension after completing the age of 58 years.
- Early Pension – After the age of 50, the employee can opt for early pension, but it is deducted by 4% every year.
- Widow Pension – If an EPFO member dies, his wife is given a monthly pension.
- Child Pension – Two children of the deceased member get pension till the age of 25 years.
- Orphan Pension – Under EPS-95 Pension Fund If both parents die, two children below the age of 25 years get pension.
- Disability Pension – If an employee becomes a victim of permanent disability during the job, he can get pension without age condition.
How to increase EPS-95 Pension ?
- Have long service – Increasing the period of job will increase the pension amount.
- Earn a higher salary – A higher pensionable salary also increases the pension amount.
- Make regular contributions – Regular contributions to EPS-95 Pension Fund will calculate the pension on a higher basis.
- Avoid higher pension scheme – If you are eligible, you can opt for higher pension scheme.
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