EPFO Pension: Members may get Rs 10,000 monthly pension under EPS despite Rs 15,000 current wage limit – Here’s how!

Oct. 9, 2024 - The Financial Express

Despite the current EPFO wage limit of Rs 15,000, members of the Employees’ Provident Fund Organisation (EPFO) can still retire with a monthly pension of nearly Rs 10,000 under the Employees’ Pension Scheme (EPS). At present, the wage ceiling for EPF and EPS contributions is Rs 15,000, The same was Rs 6,500 in 2014.

To calculate your EPS pension, key points are – maximum pensionable salary and maximum pensionable service. Average pensionable salary: Pensionable salary is the average monthly salary that an employee earns under the EPS over a specific period.

The formula for calculating the EPS pension is:EPS = Average pensionable salary × pensionable service/ 70Part 1: (Pension calculation for 10 years)Average pensionable salary: Rs 15,000Pensionable service: 10 yearsPension = Rs 15,000×10/70 = Rs 2,142.86 per monthPart 2: (Pension calculation for 25 years)Average pensionable salary: Rs 21,000Pensionable service: 25 yearsPension = Rs 21,000×25/70 = Rs 7,500 per monthTotal pension after 35 years of service = Rs 2,142.

86+ Rs 7,500 = Rs 9,642.86 per month.

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