Employee Pension Scheme : The limit of 15,000 will be over
The government may also soon remove the cap imposed under the Employee Pension Scheme (EPS). Let us know how this will affect your life.
The maximum pensionable salary is limited to Rs 15,000 per month. That is, whatever your salary may be, but the calculation of pension will be only on Rs 15,000. The matter regarding removal of this limit is going on in the court.
Every person employed becomes a member of EPS. Under this, the employee gives 12% of his salary in EPF, and then the same amount is also given by his company, but a part of this also goes to 8.33% EPS. But due to the limit of 15 thousand rupees, the total pension (8.33% of 15,000) comes to 1250 rupees.
Monthly Pension = (Pensionable Salary x Years of EPS Contribution)/70. The employee starts contributing to the EPS after September 1, 2014, then the pension contribution will be Rs 15,000. Suppose he has worked for 30 years. Monthly Pension = 15,000X30/70Here are the criteria :
It is necessary to be an EPF member for pension.
It is mandatory to be in the job for at least 10 regular years.
Pension is available when the employee turns 58.
There is an option to take pension after 50 years and even before the age of 58.
Keep in mind that on the first pension, you will get the reduced pension and for this you will have to fill Form 10D.
On the death of the employee, the family gets pension.
If the service history is less than 10 years, then they will get the option to withdraw the pension amount at the age of 58 years.