pf pension
Employee Pension Scheme (EPS) provides financial security to employees during their retirement by providing lifelong pension benefits and social security. Let us tell you that EPS, launched on November 16, 1995, had replaced the Employees Family Pension Scheme of 1971. The EPS 1995, managed by the Employees’ Provident Fund Organization (EPFO), contains provisions for paying pension to EPF contributors and providing benefits to their family members and nominees. Any person employed by the Central Government who retires as per pension rules is eligible to receive pension after completing a minimum service period of ten years. Organized sector employees covered under the Employees Pension Scheme can avail pension on attaining the retirement age of 58 years.
How is the pension amount calculated?
Pension = (Pensionable salary (average of last 60 months) x Pensionable service)/70.
Let us assume that when a PF subscriber enrolls in the Employees’ Pension Scheme 1995 at the age of 23 and retires at the age of 58, contributing in the current salary limit of Rs 15,000, he will get the pension on completion of 35 years of service. One can get pension of around Rs 7,500.
Formula: (Pensionable Salary x Pensionable Service)/70 = (15,000 x 35)/70 = Rs 7,500.
What is the eligibility to get pension?
To get pension, an EPF subscriber must work for at least 10 years and retire after reaching the age of 58 years. Alternatively, customers over the age of 58 are also eligible for the pension, even if they have not yet retired. Additionally, EPF subscribers who are 50 years of age and have served for more than 10 years are also eligible to receive pension benefits. On the death of the EPFO member, the pension will be automatically distributed to the spouse (widow/widower). Additionally, children are entitled to receive benefits up to the age of 25, with a maximum of 2 children at a time. If there is a disabled child in the family, they will get a lifetime disability pension in addition to the two children’s pension.
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