Anyone employed in the private sector in India. He possesses a PF account. In India, the Employees’ Provident Fund Organization (EPFO) manages PF accounts. 12% of the salary of the PF account holder is placed into the PF account. The employer makes the same contribution, with 8.33 percent allocated to the pension fund and 3.67 percent directed to the PF account. Frequently, many individuals ponder this question. If a PF account holder has been employed for 60 years. What will his pension be after 60 years? What regulations does EPFO have concerning this? Now, let’s discuss its full calculation.
Regulations of EPFO concerning pensions
As per EPFO regulations, if an individual contributes to a PF account for a decade. Thus, he becomes an applicant for a pension. After 50 years, the account holder of the PF can request a pension. However, if he requests a pension before turning 58, a deduction of 4% will apply for each year prior. In other words, if an individual retires at 54 years old, a 16% reduction will apply.
Yet, after 58 years, nobody has claimed their pension. By the time he turns 60, he will receive an 8% higher pension due to an annual increase of 4%. According to the existing regulations of EPFO, the highest cap for pensionable salary is Rs 15,000. In other words, you can contribute only 15000 X 8.33/100 = 1250 rupees to your PF pension fund each month.
How much pension will be given after 60 years
If you started working at the age of 23. And you are retiring at the age of 58. So you have worked for a total of 35 years. Under the old pension scheme of EPFO, the maximum pensionable salary is Rs 15,000. When an employee leaves UPS, the pensionable salary of the last 60 months is his average monthly salary.
Calculate it like this:
Pensionable Salary X Pensionable Service/70 = Monthly Pension
15000 X 35/70 = 7500
At the same time, if you do not claim pension till the age of 8 years, then you get a pension at an extra rate of 8 percent.
