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🔴Pension Calculation Formula | Employee Pension Scheme EPS 1995 - YouTube
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Friends, in this video, let us understand
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if you are eligible for EPS scheme of PF,
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or if you are planning for future using EPS plan
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what will be your pension amount?
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considering your service and your current wages
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In this video, I will be explaining EPS.
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That is, your pension calculation
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You know that, minimum limit is ₹ 1,000
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and maximum limit is ₹ 7,500
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There is talk going on to increase minimum amount from ₹ 1,000
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It might come up to ₹ 2,000 or ₹ 3,000
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Even then, what is the actual pension you make
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exactly how much in between ₹ 2,000 & ₹ 7,500
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We will be explaining in this video
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My name is Rishab Jain, a 3rd generation Labour Law Consultant
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I and Mandeep run this channel named Labour Law Advisor
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Before we proceed, do subscribe to our channel
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& hit the bell icon so that you don't miss such important videos
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[Intro music]
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An easy formula for Pension calculation as shown on screen
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This formula says your average basic salary
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In some cases, it's written as your average pensionable income
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multiplied by the number of years of service divide by 70
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This becomes your pension. Let's understand its components
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First is your average basic salary or average pensionable income
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Friends, the average of (basic+DA) for last 5 years(60 months)
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It is called as your average pensionable income
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Suppose before if your salary was ₹ 10,000 for 3 years
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And now basic is increased to ₹ 12,000
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Average is taken of these. That means, ₹ 10,000 for 3 years
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3×10000 and for next two years it was ₹ 12,000
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plus 2×12,000 divide by 5 becomes your average basic pay
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But friends, you need to keep in mind a small rule
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Maximum considered for basic pension
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is maximum ₹ 15,000 after September 2014
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Suppose your basic pay is ₹ 50,000,
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even then for your pension calculation
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the maximum wage, Basic+DA is considered as ₹ 15,000
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For calculation before September 2014,
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Maximum ₹ 6,500 is considered only
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For example, suppose if a person
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on 1st September 2018
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wants to calculate pensionable salary for the past 5 years
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suppose Basic+DA is more than ₹ 15,000
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For the past 4 years, his basic is considered as ₹ 15,000 itself
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and for 1 year before that, which is
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from September 2013 to September 2014
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only ₹ 6,500 is considered
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The formula to take average is as
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(1×6,500) for 1 year plus (4×15,000) divide by 5
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This becomes his pensionable income
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taking average for the past 5 years
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Friends, from these calculations, you can understand
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that your maximum pensionable income
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if you have joined a job recently
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your maximum pensionable income, average of last 5 years
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is ₹ 15,000, not more than that
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That's why, to be eligible for EPS Scheme,
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your minimum service year should be 10 years
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That is, you should have worked for more than 9 years 6 months
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So that your minimum service year can be 10 years
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If your service is less than 10 years
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then you are not eligible to receive pension from EPS Scheme
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however you can withdraw the amount, you won't receive a pension
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The maximum limit is 35 years
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that is, you can fill this position till a maximum of 35
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and there is one clause you should remember
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These little things I'm saying are for your benefit,
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so listen carefully.
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If your service is of 20 or more years,
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th PF department gives you 2 years bonus
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Suppose if your service is 21 years, you can fill it as 23 years
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Your serviceable period becomes 23 years
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Suppose if your service is 33 years, you can fill it as 35 years
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But even if your service is more than 35 years,
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Maximum will be 35 years itself not more than that
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You need to divide this multiplication by 70
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Let's understand, in the first part maximum limit is ₹ 15,000
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According to amendment of September 2014
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Basic+DA maximum pensionable income is ₹ 15,000
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You can multiply it by maximum of 35 years of service, ×35
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divide by 70, that is, your maximum pension becomes ₹ 7,500
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The minimum limit of ₹ 1,000 is decided by the Government
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and there is high possibility of it being increased.
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But friends, there is one clause in PF
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in which, a person has increased his pension income from ₹ 2,300
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to ₹ 30,500. How did he do that?
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Regarding this clause of PF department,
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we want to do a case study and explain it to you
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if anyone among you can be benefited from this scheme
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So that'll be great for them
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Please let us know in the comments
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If you want to know about the case study
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Whether you want to know how did Praveen Kohli
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raised his wages/pension from ₹ 2,300 to ₹ 30,500
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If you want to know, let us know in the comments
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Friends, we hope you liked this video.
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Signing off, Rishabh and Mandeep.
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[Outro Music]
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