EPS Pension Calculator: Current age 25, pensionable service 33 years, what will be monthly pension?
Employees’ Pension Scheme (EPS) was launched in 1995 to help employees get a monthly pension post retirement. Therefore, let’s check out what will be your monthly pension if you are 25 years old and have a pensionable service of 33 years.
Employees’ Pension Scheme (EPS) is a social security offered by Employees’ Provident Fund Organisation (EPFO). This scheme helps employees avail monthly pension post retirement. But there is a catch, an employee must have completed 10 years of service. An individual will receive the pension benefit if they have joined the Employees' Pension Scheme, 1995, on or after November 16, 1995. They must be an EPFO member, and 58 years old.
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What is EPS pension?
Government employees who work for at least 10 years are eligible for pension post retirement. Similarly, workers in the organised sector who are part of the Employees' Provident Fund Organisation (EPFO) can receive a pension when they turn 58. In case a person has not contributed to 10 years of pensionable service on the date of exit or on reaching the age of 58 years. They can withdraw a lump sum or they can opt for a scheme certificate provided on the date of exit if they are not 58 years old.
Benefit of EPS
Fixed income: monthly pension is provided post retirement
Early withdrawal: If a member leaves service before turning 58 and hasn't served the required 10 years, they can withdraw the entire pension sum at age 58.
Family support: If a member dies, their family receives pension benefits.
Eligibility criteria for EPS
Individuals must complete 10 years of service.
Individuals must be an EPFO member.
To get early pension, individuals must be at least 50 years old.
For a regular pension, an individual must be 58 years old.
EPS vs EPF
Both are retirement schemes to benefit the individual post retirement but they differ based on contributions made to retirement savings. EPF provides a lump sum benefit at retirement, while EPS provides a regular pension.
EPS vs EPF
EPF allows partial withdrawals in certain cases, while EPS allows partial withdrawals at age 50 and full benefits at age 58. EPF investments, returns, and redemptions are tax-exempt, while EPS investments are not.
EPS vs EPF
EPF accounts earn interest at a fixed rate that is reviewed quarterly by the government. EPS accounts do not earn interest.
Employees' contribution to EPF
An employee's contribution to the Employees' Provident Fund (EPF) is 12 per cent of their basic salary, dearness allowance, and retaining allowance. Employees can also make voluntary contributions in addition to the mandatory 12 per cent. The total contribution, including voluntary and mandatory, cannot exceed Rs 15,000 per month.
Employers' Contribution to EPS
The contribution an employer to the Employees' Pension Scheme (EPS) is 8.33 per cent of the employee's basic pay and dearness allowance. The employer also contributes 3.67 per cent of the employee's pay to the Employees' Provident Fund (EPF).
How pension money is calculated?
The formula for calculating the EPF pension is:
Monthly pension amount = (Pensionable Salary x Pensionable Service) / 70.
Calculation
The monthly pension amount you receive depends on your pensionable salary and service. The average salary used in the formula is the average of your basic salary plus your DA for the last 12 months.
If a member dies to whom the pension is payable?
If a member dies, the pension is payable to the widow or widower first. If there is no widow or widower, the children are eligible for the pension. The pension is payable until the widow or widower remarries or dies, whichever is earlier.
Monthly pension if your current age is 25, and pensionable service is 33 years
Contributing to the (present) wage ceiling of Rs 15,000. Individuals may get about Rs 7,071 as a pension if the service is 33 years. (Pensionable Salary X Pensionable Service)/70 = (15,000x33)/70 = Rs 7,071.