EPFO has given the clarifications for the pension scheme for those doing private jobs. This becomes an important factor for all those people getting PF deducted every month from their salary and wishing to get a pension in the future. This article will give an insight into how many years one has to work to get a pension and how the pension amount is determined and calculated. If you want to have financial security after retirement, this information would help you.
History Of EPS
The Employees’ Pension Scheme, EPS, was introduced in the year 1995, primarily to provide financial support to the employees after his retirement. All the scheme operations and functions are managed by the Employees’ Provident Fund Organization, EPFO. The hallmark of the scheme is that not only the employee earns a benefit; the family members also get a benefit. In case of the demise of an employee, the nominee will get a pension under this scheme. Hence, this serves as the safety net for the employee and for the family.
Eligibility Criteria For Getting Pension
To enjoy EPS, there are some important conditions that have to be satisfied. The first and foremost condition is that one must at least have worked for a period of 10 years. This means he ought to have contributed to his EPF account for 10 years in a row. If an individual achieves this, he qualifies for the pension.
When one is 50 years of age with a 10-year service duration, he qualifies for pension application. One point to be stressed here: if you retire after 58 years of age, then the amount payable as pension will be higher. Hence, if feasible, working till 58 years of age will, therefore, benefit the employee.
Method Of Calculating Pension
Pension is calculated based on how long you were contributing to your PF account and what was your average salary during the sixty months (which is five years) preceding retirement. The pension amount itself derives its determination from these two factors.
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