What are the rules of EPSHemlata Khandelwal / 2021-11-30 12:08:42
What are the rules of the Employee Pension Scheme?
When an employee becomes a member in the Employees' Provident Fund, he also becomes a member of the EPS-Employee Pension Scheme. In this scheme 12% of employee salary contributed in the PF. And also the same will going to the employer account. But, a little part of contribution of the employer’s will be deposited to the EPS i.e. Pension Fund. The basic pay contribution in EPS is 8.33%. However, the pensionable salary maximum limit is Rs 15,000. In such a condition, only a maximum of Rs 1250 can be deposited in the pension fund every month.
Employee Pension Scheme:
The rules says that if the basic salary of an PF holder is more then Rs 15,000 or equal to 15000, then they will be deposited Rs 1250 in the fund of pension fund. And on the hand in such condition If the basic salary of an employee is Rs. 10,000 then they will contribute only Rs 833. The calculation of pension on the retirement of the employee is also considered as the maximum salary of Rs.15 thousand only. In such a situation, after retirement, employees can get only Rs 7,500 as pension under the EPS rules.
What to do if the limit of 15,000 is removed?
If they abolished the limit of Rs 15,000 from the pension, then here can received an amount of more than Rs 7,500. But, for this, the employer's contribution to the EPS will also have to be increased.
How is EPS calculated?
Formula for EPS calculation = Monthly Pension = (Pensionable Salary x Number of Contributions to EPS Account) /70.
How much pension will you get if the limit is removed?
If the limit of 15 thousand is removed and your salary becomes 30 thousand then you will get pension according to the formula. (30,000 x 30) / 70 = Rs 12,857
What are the rules of pension?
If you want to withdraw EPF amount, then you can withdraw the amount deposited in your account anytime. Whether your job is 6 months or 10 years. But, you may face some problem in withdrawing the amount of pension. Because, there are many rules for this, which you should understand.
Existing Conditions for Pension (EPS)
Must be a member of EPF (Employee Pension Scheme). Must be in job for at least 10 regular years. Pension is available on attaining the age of 58 years. Option to take pension after 50 years and even before the age of 58 years. On taking the first pension, you will get the reduced pension. For this, Form 10D has to be filled. On the death of the employee (EPS Registration holder), 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.