This text explains methods to calculate the revised EPS pension assuming the contribution is 8.33% of their fundamental + DA. After the latest supreme courtroom ruling on the Worker Pension Scheme (EPS), EPFO subscribers, as of 1st Sep 2014, can retrospectively contribute 8.33% of their fundamental + DA to the EPS through a deduction from the EPF. The choice to do that has been opened solely to a piece of workers and is anticipated to be expanded quickly.
EPS Pension Quantity = (Pensionable Wage * Service Interval)/70
Pensionable wage = common of final 60 months’ EPS contributions from the date of retirement.
Earlier, EPS contributions have been capped at Rs. 6,500 after which at Rs. 15,000. So the pensionable wage might by no means be larger than Rs. 6,500 or Rs. 15,000
EPS contributions can now be 8.33% of an worker’s fundamental wage + DA. Notice: Solely workers who joined earlier than 1st September 2014 are eligible for this. Those that joined the EPF after 1st Sep. 2014 aren’t a part of the EPS.
The pensionable wage continues to be outlined as the common of the final 60 months’ EPS contributions from the retirement date. Simply that now the EPS contribution will likely be larger.
Pensionable service is the entire variety of years in service (the precise calculation would convert this into days). If an individual has accomplished 20 years of service, two years could be added as a bonus to the pensionable service.
An illustration is proven beneath by computing the pensionable wage because the annual common of the final 5 years (as an alternative of the common month-to-month over the past 60 months)
The wage is assumed to extend yearly by 10%, and the service is assumed to be 20 years (so 20+2 is used within the calculation). The revised EPS pension has now doubled.
Is it price choosing this revised EPS pension by deducting retrospective larger EPS contributions from the EPF and shifting it to the EPS? We focus on this right here: Ought to I go for a better EPS pension by contributing a lump sum?
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