EPFO Pension Scheme: Employees’ Provident Fund Organization (EPFO) has extended the last date of application for getting more pensions. Now applications for this can be made till May 3, 2023. For this reason, if you are thinking of choosing the high pension option, then before that you should know some important things.
For example, in the high pension option, how much money is going to be deducted from your salary every month, how will the new calculation be, or how much pension you are going to get? So let us know the answers to these questions in detail.
How much money is deducted at present?
Before choosing the option of a high pension, it should be known how much money is currently deducted from your salary for the Employees Pension Scheme (EPS). At present, the employee’s contribution to the EPF account is 12% deducted from the basic salary and dearness allowance and the same 12% is contributed by the employer. Of this, 8.33% goes to EPS and 3.67% goes to the employee’s EPF account.
This much money will be deducted from the new pension option
If you opt for a higher pension under EPFO then 8.33% of your basic salary can go to EPS. However, if you opt for the High Pension option, the EPFO will deduct the EPS amount from your PF account. This will be based on your joining date or 1st November 1995, whichever is later.
How much pension amount will be received?
The formula to calculate EPS pension is – Pensionable Salary X Pensionable Service)/70. In this way, let us assume that you have been employed for 25 years and you retire at 58, so accordingly you work for 33 years. If your salary is Rs 40,000, then on this basis your pension will be something like this:
Normal Pension Scheme: Under the Normal Pension Scheme, in this situation, you will get Rs 7071 [(Rs 15000×33)/70] as a pension every month.
Higher Pension Option: If you opt for a higher pension then you will get Rs 18,857 [(Rs 40000×33)/70] as a pension every month and its amount will also increase with the salary increase.
(Note: EPFO has not yet declared the pension calculation process. Our calculation is based on the old pension calculation formula. So, you must wait for the EPFO circular on pension calculation to clarify whether you can opt for a higher pension. How much pension can be received by choosing)