Big update on EPS! THIS is how your pension is likely to double after retirement
Big update on EPS! THIS is how your pension is likely to double after retirement.
After talks of rise in minimum pension under Employees’ Pension Scheme or EPS from Rs 1,000 to Rs 9,000, removing the Rs 15,000 per month cap from the maximum pensionable salary is due for hearing in the court.
The cap on maximum pensionable salary means whatever your salary may be, the calculation of pension will be only on Rs 15,000. The matter regarding removal of this limit is going on in the court. Employees are now keeping an eye on the verdict as removal of the cap will mean higher pension for the retired employees.
On August 12, the Supreme Court had adjourned the hearing of a batch of petitions filed by the Union of India and the Employees’ Provident Fund Organisation (EPFO), which said that the pension of employees cannot be limited to Rs 15,000. However, discussions on the matter are on.
What are the present rules
When a person enters a job, he/she becomes a member of Employees’ Pension Scheme or EPS.
The employee gives 12% of his salary in EPF and the same amount is also given by the company.
But a part of this amount, that is 8.33% also goes to Employees’ Pension Scheme (EPS).
As per the old rules challenged in court, the maximum pensionable salary of an employee is Rs 15,000.
This means that every month the pension share is maximum 8.33% of 15,000 which is Rs 1250.
Even when the employee retires, maximum salary for calculating the pension is considered Rs 15,000.
According to this, the maximum pension an employee can get under EPS is Rs 7,500.