This text explains methods to calculate the revised EPS pension assuming the contribution is 8.33% of their primary + DA. After the current supreme courtroom ruling on the Worker Pension Scheme (EPS), EPFO subscribers, as of 1st Sep 2014, can retrospectively contribute 8.33% of their primary + 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 primary wage + DA. Observe: Solely workers who joined earlier than 1st September 2014 are eligible for this. Those that joined the EPF after 1st Sep. 2014 will not be a part of the EPS.
The pensionable wage continues to be outlined as the typical of the final 60 months’ EPS contributions from the retirement date. Simply that now the EPS contribution shall be larger.
Pensionable service is the whole variety of years in service (the precise calculation would convert this into days). If an individual has accomplished 20 years of service, two years can be added as a bonus to the pensionable service.
An illustration is proven under by computing the pensionable wage because the annual common of the final 5 years (as a substitute of the typical 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 value 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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