Presently, the employer's contribution towards the pension scheme is a maximum of Rs. 541/- based on Rs. 6500/-. Please let me know if, with the new changes, the basis should be Rs. 15000/- so that the employer's contribution towards the pension at 8.33% is a maximum of Rs. 1250/-.
Regards,
V M Sapale
From India, Bhiwandi
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1Regards,
V M Sapale
From India, Bhiwandi
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Hi,
Yes, 1250 is the maximum limit. This amount will be shifted from the 3.67% of PF contribution to 8.33% of EPS contribution. The total amount will remain the same.
Please refer to the attached Excel calculation for better understanding.
From India, Visakhapatnam
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Yes, 1250 is the maximum limit. This amount will be shifted from the 3.67% of PF contribution to 8.33% of EPS contribution. The total amount will remain the same.
Please refer to the attached Excel calculation for better understanding.
From India, Visakhapatnam
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If an employee works for 30 years, with this scheme of EPF & EPS, the total contribution to EPS with 8% annual interest becomes Rs. 24,00,000 (TWENTY FOUR LAKHS), but we get a pension of Rs. 2500 to 3500 max. and nobody is sure how long we take pension also. The principle is not returned. So where is the justice in this scheme. It should not have been made compulsory. Why nobody is raising voice against this...
From India, Bangalore
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From India, Bangalore
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Hi Kumar,
I agree with you; the worst part is that interest on pension contributions is not applicable. A long period of pension savings under the EPS scheme gives low returns, which is unjustified. The minimum pension declared is 1000. As mentioned in the notification, all words or figures of 6500 will be replaced with 15000. The minimum pension per month would be 15000, am I correct? Correct me if I phrased it wrong in that.
Thanks & Regards,
Pawan Kumar P
From India, Visakhapatnam
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I agree with you; the worst part is that interest on pension contributions is not applicable. A long period of pension savings under the EPS scheme gives low returns, which is unjustified. The minimum pension declared is 1000. As mentioned in the notification, all words or figures of 6500 will be replaced with 15000. The minimum pension per month would be 15000, am I correct? Correct me if I phrased it wrong in that.
Thanks & Regards,
Pawan Kumar P
From India, Visakhapatnam
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Hi Pawan,
No, it is not 15000. If an employee works in this slab for 30 years, he will get 6428.57 as a pension. The next column in your attachment accumulates this pension amount for 20 years, which is of no use. But what is the guarantee that a person will enjoy the pension for 20 years? Our argument is: what happens to the principal and the interest for the service period? They could retain the pension amount as 541 only even if the PF calculation is for 15000 if they want to do any good/favor to the employee community.
Thanks & Regards,
Mohan
From India, Bangalore
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No, it is not 15000. If an employee works in this slab for 30 years, he will get 6428.57 as a pension. The next column in your attachment accumulates this pension amount for 20 years, which is of no use. But what is the guarantee that a person will enjoy the pension for 20 years? Our argument is: what happens to the principal and the interest for the service period? They could retain the pension amount as 541 only even if the PF calculation is for 15000 if they want to do any good/favor to the employee community.
Thanks & Regards,
Mohan
From India, Bangalore
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Hi Mohan,
Thank you very much for your assistance. In my previous reply, I mistakenly wrote "minimum pension 15000" instead of "maximum pension 15000."
Let me rephrase it below:
1. The minimum pension limit is 1000, as per the recent notification. Is there a maximum figure for pension eligibility? If so, is it 15000? If yes, could you please provide the section of the act or notification where this is specified?
2. Could you also share the calculation method you used to arrive at the pension value of 6428.57/-? I have utilized the formula (Pensionable salary * Pensionable service) divided by 70 for the calculation. I have detailed the monthly breakdown in the attachment of my previous reply.
3. As an example, I assumed a scenario where an employee receives pension for 20 years. The PF act mentions that the family members of the nominated employee are eligible for pension after the employee's tenure.
4. My calculations are based on the assumption of a new employee joining now and forecasting future amounts based on the current process.
5. I agree with Kumar's point regarding the lack of interest on pension contributions. Saving for a long period under the EPS scheme yields low returns, which seems unfair.
Could you advise on the appropriate channels to address these concerns? As a young professional, I anticipate changing firms within 5 to 9 years. In such a scenario, I plan to opt for withdrawal and invest the lump sum in alternative options for better returns exceeding the future pension benefits.
Considering the possibility of staying beyond 9 years and six months in an organization, where withdrawal is not feasible due to pension eligibility criteria, how should I proceed?
Thanks & Regards,
Pavankumar P
From India, Visakhapatnam
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Thank you very much for your assistance. In my previous reply, I mistakenly wrote "minimum pension 15000" instead of "maximum pension 15000."
Let me rephrase it below:
1. The minimum pension limit is 1000, as per the recent notification. Is there a maximum figure for pension eligibility? If so, is it 15000? If yes, could you please provide the section of the act or notification where this is specified?
2. Could you also share the calculation method you used to arrive at the pension value of 6428.57/-? I have utilized the formula (Pensionable salary * Pensionable service) divided by 70 for the calculation. I have detailed the monthly breakdown in the attachment of my previous reply.
3. As an example, I assumed a scenario where an employee receives pension for 20 years. The PF act mentions that the family members of the nominated employee are eligible for pension after the employee's tenure.
4. My calculations are based on the assumption of a new employee joining now and forecasting future amounts based on the current process.
5. I agree with Kumar's point regarding the lack of interest on pension contributions. Saving for a long period under the EPS scheme yields low returns, which seems unfair.
Could you advise on the appropriate channels to address these concerns? As a young professional, I anticipate changing firms within 5 to 9 years. In such a scenario, I plan to opt for withdrawal and invest the lump sum in alternative options for better returns exceeding the future pension benefits.
Considering the possibility of staying beyond 9 years and six months in an organization, where withdrawal is not feasible due to pension eligibility criteria, how should I proceed?
Thanks & Regards,
Pavankumar P
From India, Visakhapatnam
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EPS - Form No. 10-D Pension Claim Form Aadhaar.pdf