If you are working in any private company, you will get good news soon. Government is taking important steps to benefit private sector employees as well as government employees.
Government has launched Employees Provident Fund (EPF) or PF scheme for the future of low paid employees.
Till now only government employees were getting good pension. Private sector employees are also eligible for pension at this level. The government is planning to increase the amount of pension for private employees under EPFO. 10,500 per month after retirement for private sector employees. Will be available.
Increase in basic pay.?
The government is reportedly planning to increase the basic salary limit of EPFO members from Rs 15,000 to Rs 21,000. This change is expected to take effect in 2025. This will increase the pension of private employees after retirement.
Current Contributions:
Generally, private sector employees contribute 12% of their basic salary to provident fund. The company they work for deposits 12% contribution in EPFO. However, the offer made by the company is divided into two parts.8.33% goes to Employees Pension Scheme (EPS). 3.67% is contributed to the Employees Provident Fund (EPF) scheme. In this way, the amount deposited in the pension scheme and the income earned on it will be pensioned after retirement.
The pension contribution will increase after the government hikes the basic salary next year. Currently, EPS contributions are calculated on a maximum basic salary of Rs 15,000. This limits the contribution to 1,250 per month. If the salary limit is raised to 21,000, the EPS contribution increases to 1,749 per month (8.33% of Rs.21,000).This will create more pension corpus. Monthly pension is more than 10 thousand. But to be eligible for EPS pension, you have to contribute to the scheme for at least 10 years. Pension payments start after you reach 58 years.
How much pension amount.?
As per Employees Pension (Amendment) Scheme, 2014, EPS pension is calculated as per this formula. (Number of years of pensionable service × 60 months average monthly salary)/ 70 (Number of years of pensionable service × 60 months average monthly salary)/70