In order to avoid issues, especially if you are a private sector employee, there are several factors that you should comprehend. It is known that employees of PF, which is a part of salary deposited in the EPF account, do not face any issues. The EPFO has come up with a new scheme for the employees who are enrolled under the PF. This scheme will provide pension benefits on a monthly basis. The scheme that was launched to provide the PF employees with a pension is referred to as EPS.
Additionally, there is an additional advantage of a monthly pension under the EPS scheme. In short, If your pensions are being cut from your pay check, Under which clause are you entitled for the pension benefit? After learning all this information, you can put an end to your uncertainties, hence, there will be no hitch. There will be no difficulty to avail the benefit of EPS. It will be a pension that you will appreciate and is offered every month after one is retired from service and thus aids in making the latter stage of life enjoyable.
Important things related to EPS scheme
In any case, if there is even one PF member of the family, he will have to take the benefit of the EPS scheme. EPS scheme was initiated inshut 1995. Ever since, many employees have become part of it. This scheme shall however be available to only the workers in the organized sectors. In order to qualify for the scheme, one should have completed at least 10 years of service as an employee.
Except for those employees who are below the age of fifty-eight years, a pension shall be awarded. I bet this will leave you wondering how many thousands of rupees your pension will be per month. Actually, PF account is credited with 12 percent of an employees basic wage plus DA. The companies share is also in the amout of 12 percent.
Of the share made by the employer, 8.33 percent goes to the employee pension trust. In addition to this, 3.67 percent is invested in the PF account.The ceiling limit of the pensionable salary is Rs 15000 as per the existing regulations. In that case the pension amount would be 15000 x 8.33/100 = 1250 per month.
How much salary will be as per the current rules of EPFO
If an individual starts earning at 23 years of age and stops working after turning 58, then your working duration is 35 years. As per the old scheme, pensionable ceiling limit is Rs.15000 for contributory pension scheme. Monthly pension = Pensionable salary multiplied by pensionable service divided by 70, Monthly pension: 15000 x 33/70 = 7500 Rs per month pension.