Employees pension scheme EPS-95: Private sector employees can get big relief. There can be a manifold increase in the pension of a salaried person who contributes to the Employees’ Provident Fund (EPF). The EPFO board can take a decision on this soon.
It is believed that under the Employees’ Pension Scheme-95, the pension can increase by 333%. In the Employees’ Pension Scheme, the maximum pension is fixed at Rs.15 thousand. After this it is sealed. Meaning, even if the basic salary is more than Rs 15,000 per month, your pension will be calculated on the maximum salary of Rs 15,000.
EPS Pension can increase manifold!
The ceiling of pension matter is pending with the Supreme Court bench. It has been heard at many levels. The union is continuously demanding that the capping on pension should be abolished. If the decision is in favor of the employees, then the calculation of pension (Employee’s Pension Scheme) can also be done on the last salary i.e. high salary bracket.
With this decision, it is possible to increase the pension of employees up to 300%. The condition for getting pension under EPS is that it is necessary to contribute to the Employees’ Provident Fund (EPF) for 10 years. At the same time, the weightage of 2 years is available on completion of 20 years of service. Removing the ceiling will make a big difference.
How will your pension increase in EPS-95?
According to the existing rules, if an employee is doing a job from June 1, 2015 and if he wants to take pension after completing 14 years of service, then his pension would be calculated at Rs 15,000 only. Whether the employee is in basic salary of 20 thousand rupees or 30 thousand rupees. According to the old formula, the employee will get a pension of about Rs 3000 from June 2, 2030, on completion of 14 years. The formula for calculation of pension is- (Service Historyx15,000/70). But, if the ceiling of pension is abolished, then the pension of the same employee will increase.
Example No.1
Suppose the salary (Basic Salary + DA) of an employee is at 20 thousand rupees. Calculating with the formula of pension, his pension will become Rs.4000 (20,000X14)/70 = Rs.4000. Similarly, the higher the salary, the more he will get the benefit of pension. There can be a 300% jump in the pension of such people.
Example No.-2
Suppose the job of an employee is 33 years. His last basic salary is 50 thousand rupees. Under the current system, the calculation of pension would have been done only on the maximum salary of 15 thousand rupees. In this way (Formula: 33 Years+2= 35/70×15,000) the pension would have been Rs 7,500 only. This is the maximum pension in the current system. But, after removing the pension ceiling, adding pension according to the last salary, they will get a pension of 25000 thousand rupees. Means (33 years+2= 35/70×50,000= Rs 25000).
333 percent salary will increase
Let us tell you that according to the rules of EPFO, if an employee contributes to the EPF continuously for 20 years or more, then two more years are added to his service. In this way, 33 years of service was completed, but pension was calculated for 35 years. In such a situation, the salary of that employee can increase by 333 percent.
