Employee Pension Scheme: Pension is fixed on the retirement of employees. But, having a limit in this, the pension after retirement is not very high. Therefore, there is a demand to remove this limit.
Employee Pension Scheme: There is a constant discussion going on to remove the cap on investment under the Employee Pension Scheme (EPS). At present, the maximum pensionable salary is limited to Rs 15,000 per month.
Employees now have high expectations from the court. But what does this hearing and this matter have to do with you and how will it affect your life, today we explain to you here.
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 regarding removal of this limit is going on in the court.
On August 12, 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. However, the discussion is going on continuously.
What are the rules regarding EPS now?
When we start a job 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 it also goes to 8.33% 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 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 Rs 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 = 15,000X30/7= Rs 6428
Maximum and Minimum Pension
Keep in mind 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 count. The minimum pension amount under EPS is Rs 1000 per month, while the maximum pension is Rs 7500.