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The Employee Pension Scheme (EPS) gives you a fixed income after retirement. You can start receiving a pension at 58 or opt for early pension at 50. If you leave your job 10 years before turning 58, you can withdraw the pension amount in one go at 58. Let's calculate your monthly pension with a basic salary of Rs 70,000 and 30 years of service.

The Employees' Pension Scheme (EPS) is a retirement plan in India that offers a monthly pension to employees in the organized sector after they retire. Registered with the EPFO, EPS provides a guaranteed income, ensuring financial security post-retirement. 

To qualify for an EPS pension, you will need to meet these three requirements:

1. Age 50 (for early pension) or 58 (for regular pension)

2. EPFO registration

3. Minimum 10 years of service

You and your employer both contribute 12 per cent of your basic salary.

Your employer's 12 per cent contribution is split:

8.33 per cent goes to Employee Pension Scheme (EPS) for your pension

3.67 per cent goes to the Employees' Provident Fund (EPF) for your savings

The Employee Pension Scheme (EPS) provides fixed income after retirement. You can either receive a pension at the age of 58 or opt for early retirement at 50.

If you leave service 10 years before turning 58, you have the option to withdraw the entire pension amount at the age of 58, providing a lump-sum benefit.

In the Employee Pension Scheme (EPS), you can nominate a person to receive pension benefits in case of your demise. Nominees can be family members like spouse, children, or dependent parents, or anyone else if you don't have family.

Also Read: PPF for Regular Income: How to plan for over Rs 7 lakh a year tax-free income?

The Employee Pension Scheme (EPS) provides a monthly pension ranging from a minimum of Rs 1,000 to a maximum of Rs 7,500.

The formula for calculating the EPS pension is: 

Monthly pension amount = (Pensionable Salary x Pensionable Service) / 70.

The monthly pension amount you will receive will depend on your pensionable salary and service. The average salary used in the formula is the average of your basic salary plus your DA for the last 12 months.

This Rs 70,000 basic salary includes Dearness allowance. Note that the Cabinet approved a 2 per cent increase in Dearness Allowance for central government employees, raising it from 53 per cent to 55 per cent.

Contributing to the (present) wage ceiling of Rs 15,000. Even if someone's basic salary and dearness allowance is Rs 70,000, their EPS pension will be calculated at the wage ceiling, which is Rs 15,000. Individuals may get about Rs 6,429 as a pension if the service is 30 years. (Pensionable Salary X Pensionable Service)/70 = (15,000x30)/70 = Rs 6,429.

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