Employees Provident Fund (PF) is an important savings scheme, in which both employees and employers contribute every month. But have you ever thought how much pension you will get after the age of 60? In this article, we will tell you in detail about PF pension rules, calculations and necessary conditions.
What is the difference between EPF and EPS?
Employees Provident Fund (EPF) and Employees Pension Scheme (EPS) are often considered the same, but the two are different. EPF is a scheme to save for your retirement, which contributes to you and your employer. While EPS is a pension scheme run by the government, 8.33% is contributed by the employer.
How is pension calculated after the age of 60 years?
There is a certain formula to calculate pension under EPS:
Average Monthly Salary = Average Salary of Last 60 months
Total Service Year = As many years you have contributed to EPS
70 = standard number set by government
For example, if a person has an average monthly salary of ₹ 15,000 and has contributed to EPS for 30 years, his monthly pension will be:
Eligibility Conditions for EPS Pension
Service period: It is mandatory to contribute to EPS for at least 10 years.
Age limit: The minimum age to get pension should be 58 years. If someone wants to get a pension between 50-58 years, he will get less pension.
Pension hike: Even after the age of 60, if a person continues contribution, he can get more pension.
Ways to get more pension
Do a long job: The more years you contribute to the EPS, the greater your pension.
Choose high -paying jobs: Your last 5 -year salary determines your pension, so doing high -paid jobs can be beneficial during this period.
Take advantage of the voluntary provident fund (VPF): This will make your total savings more.
conclusion
The EPS scheme associated with PF provides a stable income after retirement. If you have contributed more than 10 years, you can get regular pension after the age of 60 years. Therefore, it is necessary to focus on the duration and salary of your job, so that financial security can be ensured after retirement.
