EPS Pension Calculation: ₹62,000 Salary? Find Your Monthly Pension For 16, 24 & 32 Years Of Service

For employees planning their retirement, understanding the Employee Pension Scheme (EPS) is vital. Managed by the Employees' Provident Fund Organisation (EPFO), EPS offers a stable monthly pension after retirement. While this scheme is often mentioned alongside EPF, it serves a separate and specific purpose—providing financial security in the form of pensions to eligible employees and their families. Let’s decode how EPS works, who can benefit from it, and how much pension you can expect based on your years of service.

Who Is Eligible To Receive EPS Benefits?

Employees who are part of the EPFO system and have completed a minimum of 10 years of eligible service can qualify for a pension under EPS. While the standard retirement age is 58 years, members may also opt for early retirement from the age of 50, although this results in a reduced pension. Additionally, those working in establishments covered under the EPF Act automatically become part of the EPS.

EPS Contribution Structure: Know Where Your Money Goes

Your employer’s contribution to your retirement fund doesn’t entirely go to your EPF. Out of the 12% of basic salary that your employer contributes, 8.33% is directed to the EPS, while the remaining 3.67% goes into the EPF. This allocation continues throughout your service and builds your pension entitlement under EPS. Notably, employees themselves do not contribute directly to the EPS account.

What Is The Minimum Pension Under EPS ?

The minimum monthly pension guaranteed under EPS is ₹1,000. This amount applies even if your eligible service or salary is on the lower end, ensuring a basic level of income after retirement. However, your actual pension can be significantly higher depending on how long you have worked and your pensionable salary.

EPS Pension Formula: How Your Pension Is Calculated

The monthly pension under EPS is calculated using a simple and fixed formula:

Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70

Here, Pensionable Salary refers to the average monthly basic salary and dearness allowance for the last 12 months of service. It's important to note that the maximum salary considered for EPS calculation is ₹15,000, even if your actual salary is higher.

Example Calculations: Based On Years Of Service

Using the fixed wage ceiling of ₹15,000, here's how your pension could look depending on your total service duration:

With 16 Years Of Service

(15,000 × 16) ÷ 70 = ₹3,428 per month

With 24 Years Of Service

(15,000 × 24) ÷ 70 = ₹5,142 per month

With 32 Years Of Service

(15,000 × 32) ÷ 70 = ₹6,857 per month

According to experts, longer service duration directly increases your monthly pension, making it beneficial to continue in EPS-covered employment for a more extended period.

What Happens When You Change Jobs?

When you switch jobs, your EPF balance gets transferred to your new account. However, your EPS amount remains with the previous employer’s account, even though your service record continues seamlessly. This way, your total pensionable service is tracked cumulatively, ensuring accurate pension eligibility.

Updating Your EPS Nominee Is Possible

Members can nominate family members to receive pension benefits in their absence. If you do not have any eligible family members, you may nominate any person of your choice. Nomination details can be updated as per EPS rules to reflect your latest preferences.

Who Gets EPS Benefits In Case Of The Employee's Demise?

If an EPS-covered employee passes away, the pension is paid to their spouse or eligible family members. This survivor benefit is one of the key protections offered by the scheme, ensuring that the employee’s family continues to receive financial support.


Disclaimer: This article is for informational purposes only and should not be taken as financial or legal advice. Readers are advised to consult with a qualified professional or EPFO representative before making decisions based on EPS eligibility, contributions, or pension calculations. Interest rates, wage limits, and pension rules are subject to change as per government regulations.