Deducting PF every month is a common thing for crores of employees working in the private sector. PF funds play a very important role in making life financially secure after retirement. However, most of the employees are aware of the amount deposited in EPF, but are unaware of the pension account of EPS (Employee Pension Scheme) made from the contribution provided by the company. If you have worked continuously for 15 years in a private company, it is very important for you to know how much pension you will get in your hands every month at the time of retirement.
Special formula for determining EPS pension
Pension to private employees is calculated according to the government formula and not on any estimate. The formula for finding monthly pension in EPS is: Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70. In this calculation your employment period and pensionable pay as determined by the government play the most important part. According to the amendment of 2014, the maximum limit of pensionable salary is currently fixed at Rs 15,000 per month.
Pension calculation for 15 years on a salary of Rs 15,000
If your pensionable service is 15 years and the limit salary is Rs 15,000, the pension calculation becomes very easy. First 15,000 multiplied by 15 gives 2,25,000. Then dividing this amount by 70 according to the formula comes to Rs 3,214.28. On this account, an employee who has served for 15 years can get a monthly pension of around Rs 3,214 per month after retirement.
Annual pensionable income and salary limit rule
If we calculate Rs 3,214 per month, then the employee gets a total of Rs 38,568 as pension in 12 months. It is important to understand here that if your actual basic salary is 20,000 or 30,000 rupees, then as per the government rule, maximum salary will be considered as 15,000 rupees for calculation. That is, the calculation of employees with higher salary is also based on this limit of 15,000.
Eligibility and main conditions for drawing pension
According to EPFO rules, it is mandatory for an employee to complete at least 10 years of pensionable service to get pension under EPS. So a person who has worked for 15 years easily fulfills this condition. But it is important to remember that the pension does not start immediately on completion of 15 years of service. The amount of pension starts to be paid at the time determined by the age of the employee, the year of retirement and the rules in force at that time
