EPS Pension Scheme: EPS is one such scheme which is looked after by EPS. This scheme is for employees who have completed 58 years of age. However, the employee can avail this scheme only if he has worked for at least 10 years. EPS was launched in 1995 and existing and new EPS members can join this scheme.
Both the Government/Corporate and the employees contribute equally 12 percent of the employee’s salary towards the EPS fund. However, the entire portion of employee contribution goes to EPS, 8.33 percent of the company’s contribution goes to Employees’ Pension Scheme (EPS) and 3.67 percent to EPSU every month.
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EPS pension can increase manifold
The ceiling on pension case was presented to the Supreme Court. The union has been demanding the scrapping of the pension cap. If the result is in favor of the employees, the pension (Employee Pension Scheme) can also be calculated on the last pay i.e. higher pay. The decision is sure to increase the pension of employees by up to 300%. The condition for getting pension under EPS is that it is necessary to contribute to Employees Provident Fund (EPS) for 10 years. On the other hand, on completion of 20 years of service, full weightage of 2 years is given.
How will your pension increase in EPS-95?
According to the government rules, if an employee is working from June 1, 2015 and wants to get pension after completing 14 years of service, his pension will be calculated at Rs 15,000 only. Whether the basic salary of the employee is 20 thousand rupees or 30 thousand rupees. As per the old formula, from June 2, 2030, on completion of 14 years, the employee would get a pension of around Rs 3000. Formula for calculation of pension- (Service History x 15,000/70). However, if the pension limit is abolished, the pension of this employee will increase.
This time there will be a 333 percent increase in salary
As per the rules of EPSO, if an employee contributes continuously to EPSU for 20 years or more, two more years are believed to be added to his service. Thus 33 years of service will be completed but pension will be calculated for 35 years. In such a scenario, there may be a 333% increase in the salary of those employees.
Know how to increase your pension in EPS-95
Suppose an employee’s salary (basic salary + DA) is Rs 20 thousand. Calculating from pension formula, his pension is Rs.4000 (20,000X14)/70 = Rs.4000. Likewise, the higher the salary, the higher the pension benefit. There may be 300% increase in pension of such persons.
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