At present, the pension of most employees is calculated on the EPS limit of Rs 15,000. This is done under Employees Pension Scheme (EPS), 1995. Subscribers who have applied for higher pension will be scrutinized by field officers of EPFO. Applications submitted by employers and employees will be approved after they are found to be genuine
Employees’ Provident Fund organization: The Employees’ Provident Fund Organization (EPFO) has introduced a mechanism to calculate higher pension on actual salary. This will be applicable to those subscribers of EPFO who have applied for higher pension on actual salary. At present, the pension of most employees is calculated at a limit of Rs 15,000 of EPS . This is done under Employees Pension Scheme (EPS), 1995. Subscribers who have applied for higher pension will be scrutinized by field officers of EPFO. Applications submitted by employers and employees will be approved after they are found to be genuine.
This is how the pension will be calculated
For those who retired before September 1, 2014, their pension will be calculated on the basis of their average monthly salary for the 12 months preceding retirement. For employees who retire after this date, their pension will be calculated on the basis of the average monthly salary during the 60 months preceding retirement. Now there is a formula to calculate it. Pension = pensionable salary (average of last 60 months salary) X number of years of contribution / 70.
You can apply till June 26
The Supreme Court in its November 2022 order directed the EPFO to give employees an opportunity to apply for higher pension. The last date to apply for this is June 26. Earlier it was May 3. It was extended till June 26. For this the employee has to apply. The employer will approve this application. After which the field officer of EPFO will check it. They will also examine the data and documents uploaded on the EPFO website. They have to complete this investigation within 20 days of receiving the application.
Who can apply?
Employees who were members of EPFO and EPS before September 1, 2014 and are still in service but missed the opportunity to apply for enhanced pension can now apply. Employees who retired before this date and applied for higher pension will have to validate their information.
Difference in calculation method
If you want to get pension on your actual salary instead of the pre-determined limit of Rs 15,000, you have to apply for it through EPFO’s member portal. Currently a salary limit of Rs 15,000 is used for calculating pension. Rs 1,250 (8.33% of Rs 15,000) of your employer’s contribution goes towards EPS. This amount is added to the pool created to provide regular pension to the employee.
If you want, you can put 8.33% of your actual salary into a pension pool. This will increase your pension. In addition, your employer’s contribution of 1.16% will also go towards EPS. The remaining 2.51 percent will go to your EPF.
