Primarily, Employees’ Provident Fund Organisation is looking into providing post-retirement financial security to employees. Under the EPS of 1995, employees become eligible for a pension after ten years of service. With the expected latest developments in EPFO Pension 2025, employees are very interested in knowing how much pension they would get after completing 10 years of service.
Minimum Pension Eligibility Under EPS 1995
To qualify for a pension under EPFO, one has to:
- Be a member of the EPFO and contributed to the EPS for at least ten years.
- Have an age of 58 so as to trigger the start of a pension.
- opt for an early pension at 50 years (with benefits being reduced).
Once an employee leaves his job, he can claim a pension on turning 58, considering that the criteria have been met.
What Will Be Your Pension After 10 Years?
The pension amount under EPFO is calculated as:
Monthly Pension = (Pensionable Salary × Pensionable Service) / 70
- Pensionable Salary: Average basic pay of the last drawn salary during 60 months preceding the retirement (up to ₹15,000).
- Pensionable Service: The total years contributed the employee has spent to EPS.
Example Calculation For 10 Years Of Service
- If the Pensionable Salary is of ₹15,000, and the service is of 10 years, then: (₹15,000 × 10)/70 = ₹2,142 Per Month
Hence, an employee with ten years of service will receive ₹2,142 monthly as the EPFO pension, which comes to around ₹25,700 annually.
Will EPFO Pension Increase In 2025?’
The Indian government is currently mulling over a revision of EPS pension for providing sufficient financial backing to all retirees. There are discussions going on for increasing the minimum pension from ₹1,000 to ₹3,000 a month. Such a state of affairs will be favorable to employees retiring in 2025 due to a higher level of pension benefit.
Conclusion
Retirement under the EPFO pension scheme provides monetary assistance to all employees. After sports years of service, monthly pensions are calculated based on pensionable salaries against the number of years worked. Moreover, in 2025, it is highly likely that pension reforms are initiated for increased payouts to retirees, thus supplementing their financial security. Stay updated on the latest happenings in the EPFO pension to efficiently carry on with the entire retirement plan!
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