Employee pension system: Försörjningsfond is a fantastic savings system for those who work in the private sector. In addition to tax exemption, good returns and a huge retirement are associated with its benefits. It is called a pension fund because some is deducted from the employee’s salary during work and some is deposited in the maintenance fund and some is deposited in the Employees’ pension insurance.
The pension system for employees
Employees receive the full PF amount in a lump sum at the age of 58. However, the pension amount is determined monthly. There is a formula for determining the EPS pension.
EPS is part of your salary
Like EPF, EPS is also part of the employee’s salary. At least 1,000 to 7,500 Rs are available as a pension each month in EPS. But most people do not know how to calculate the pension system for employees.
12% of the employee’s basic salary is deposited in the PF account. The employer’s contribution is also the same. But part of the employer’s contribution is deposited in EPS, ie the pension fund. The contribution for basic salary in the Employees’ pension system is 8.33%. However, the maximum limit for pensionable salary is Rs 15,000. In such a situation, only a maximum of Rs 1250 can be deposited in the pension fund each month.
Pension is available up to 7500 Rs
According to the existing rules, if the basic salary for an employee is Rs 15,000 or more, Rs 1250 will be deposited in the pension fund. If the basic salary is Rs 10,000, the grant will only be Rs 833. The calculation of pension upon retirement of the employee is also considered to be the maximum salary of Rs 15,000 (EPS upper limit). In such a situation, after retirement, employees can only receive Rs 7,500 as a pension according to the rule for employees’ pension systems.
How is the calculation of the pension system for employees made?
- Formula for EPS calculation = Monthly pension = (Pensionable salary x Number of contributions to EPS account) / 70.
- If one’s monthly salary (the average of the last 5 years’ salary) is Rs 15,000 and the length of service for the job is 30 years, he will receive a pension of only Rs 6,828 per month.
- The entire amount deposited under Arbetstagarnas Pension during the service history is deposited with the state. Its benefit is available upon retirement.
How much pension will you receive if the border is removed?
If the limit of 15 thousand (EPS upper limit) is removed and your salary becomes 30 thousand, you will receive a pension according to the formula. (30,000 X 30) / 70 = 12,857 Rs
Minimum pension will be Rs 9000?
Employees’ pension scheme (Employees Pension Scheme) There is a requirement to increase the minimum pension from Rs 1000. This can be discussed during the chairmanship of Minister of Labor Bhupendra Yadav. In March 2021, the Parliamentary Standing Committee recommended that the minimum pension amount be increased from Rs 1,000 to Rs 3,000. But the pensioners’ requirement is that the pension amount is much smaller, it should be increased to at least 9000 Rs. EPS-95 retirees will receive the benefit in the true sense.
The basic right is Pension: Employees’ pension system
The Supreme Court of 5 states has considered pensions a fundamental right. The question of its sealing is pending in the Supreme Court. If the roof is removed, its benefit will lie in the pension. However, there is a requirement that the Employees’ pension scheme must be determined according to the employee’s last salary shortly before retirement. The Ministry of Labor may consider the issue.
What are the conditions for EPS
EPFO has established certain conditions for EPS. It is necessary to be a member of the EPF for the first pension. It is also mandatory to stay in the service for at least 10 regular years. Only then are you entitled to a pension. Pension is available at the age of 58. However, it is possible to draw a pension after the age of 50 and also before the age of 58. If you take out the first pension in the Employee Pension, you will receive a smaller pension. For this, form 10D must be filled in. In the event of the employee’s death, the family receives a pension. If the service history is shorter than 10 years, they are given the opportunity to withdraw the pension amount at the age of 58.
Also know – Indira Gandhi Pension Yojana: The system provides financial support in all states of the country, know the benefits
PM Jan Dhan Account Facility: Full benefit of 10 thousand is available on this account, know how