Employee Pension Scheme (EPS) EPS is a Government of India scheme. Through this, pension is given to the employees of the organized sector. Today we are going to tell about the method of pension calculation in this report.
Under the Employee Pension Scheme (EPS), every employee of the organized sector is given pension on behalf of EPFO. This scheme was started in 1995 by the Central Government. Its objective is to provide social security benefits to the organized sector employees along with securing their future. The EPS scheme automatically gets linked with the employee registering with the EPFO.
When do you get pension in EPS scheme?
The EPS scheme is run by the Employees’ Provident Fund Organization (EPFO) . Under this, pension is given to the employee after the age of 58 years. To get pension, the employer and the employee have to contribute 12 per cent of the salary to EPF, of which 8.33 per cent goes to EPS.
Advantages of EPS Scheme
- EPS is a Government of India scheme. There is a guarantee of return in this.
- Employees whose salary and DA is Rs 15000 or less. They have to register in it.
- You can withdraw money from EPS after attaining the age of 50 years.
- After the death of the beneficiary, the pension in EPF goes to the wife and then to the children.
- In this, any person gets a minimum monthly pension of Rs 1000.
What is the formula to calculate pension in EPS?
- The formula for pension calculation in EPS = Average Salary * Length of Service / 70
Average Pay means Basic Pay + DA drawn in the last 12 months. - For example the average salary of a person is Rs.15,000 and he has worked for a period of 35 years. So he will get a pension of (15000 * 35 / 70) = Rs 7,500 per month.
