EPS Pension Calculation: ₹94,000 Salary With 18, 25 & 32 Years Of Service

For salaried employees in India, the Employee Pension Scheme (EPS) plays a critical role in ensuring a steady income post-retirement. While many people contribute to the EPS as part of their monthly deductions, few understand exactly how the pension amount is calculated—or what they can realistically expect when they retire. For employees earning a salary of ₹94,000 per month, the pension amount under EPS does not reflect their full earnings but is calculated based on a specific wage ceiling. According to experts, knowing your expected EPS payout is essential for better retirement planning.

Here’s a detailed breakdown of the pension you can expect at age 58 if your monthly salary is ₹94,000, based on varying lengths of service under the EPS scheme.

Who Qualifies For Pension Under EPS?

As per official guidelines, to be eligible for a monthly pension under the EPS, one must fulfil the following criteria:

• Must be an active member of the Employees' Provident Fund Organisation (EPFO)
  
  
  
• Should have completed a minimum of 10 years of service

Can claim early pension from age 50 (with reduced benefits) or full pension from age 58

Even though your actual basic salary may be significantly higher, the EPS scheme calculates your pension using a capped salary figure, currently fixed at ₹15,000.

How EPS Contributions Are Made

When you and your employer contribute to your Provident Fund each month, a portion of your employer's contribution is directed towards the pension fund. Here's how it’s divided:

• You contribute 12% of your basic salary

Your employer contributes 12% as well, out of which:

• 8.33% goes to the EPS (up to a salary cap of ₹15,000)
  
  
  
• 3.67% goes to your EPF
  
  
  

It’s important to note that even if your salary is ₹94,000 per month, EPS calculations are limited to ₹15,000, unless you are part of the now-discontinued higher pension option scheme.

The EPS Pension Formula

According to experts in financial planning, the formula for calculating your monthly EPS pension is:

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

Here, Pensionable Salary is taken as ₹15,000 (the current ceiling), and Pensionable Service is your total number of years in service.

EPS Pension Amount For Different Service Periods

Let’s consider the pension amounts an employee with a fixed monthly salary of ₹94,000 might expect upon reaching 58, based on their length of service.

For 16 Years Of Service

• Pension = (15,000 × 16) ÷ 70
  
  
  
• Result = ₹3,429 per month

Despite earning well above the pensionable limit, the monthly pension remains modest due to the capped salary calculation.

For 26 Years Of Service

• Pension = (15,000 × 26) ÷ 70
  
  
  
• Result = ₹5,571 per month
  
  
  

With over two decades of contribution, the pension increases, but still remains far below the actual salary levels.

For 32 Years Of Service

• Pension = (15,000 × 32) ÷ 70

Result = ₹6,857 per month

Even after three decades of service, the maximum pension stays below ₹7,000 unless enrolled under the higher pension contribution scheme.

Why Your Pension Is Capped Despite A High Salary

As the EPS calculates payouts based on a statutory wage ceiling, high earners do not see a proportional increase in their pension. The only exception is for those who opted into the higher pension scheme under EPS 95, which allowed contributions based on actual salary—but this window has closed, and access to that route is currently under legal review.

Additional Considerations For Pension Planning

According to experts, while the EPS provides a guaranteed income, it may not be sufficient to sustain one’s post-retirement lifestyle—especially for those accustomed to higher earnings. Hence, it is recommended to diversify retirement savings through Public Provident Fund (PPF), National Pension System (NPS), and mutual fund SIPs in addition to EPS.

Moreover, pension under EPS is payable for life and also comes with family pension benefits for the nominee or spouse, which adds to its reliability, albeit with limited quantum.

Understanding how the EPS pension works allows employees to manage their retirement expectations more realistically. While the scheme is a dependable part of India’s social security framework, its benefits are modest unless supplemented by other forms of retirement savings. For high earners, this becomes especially important, as their monthly EPS pension remains unaffected by their actual salary beyond the wage ceiling.

Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. Pension estimates are based on current EPS rules and calculations. For personalised planning, consult a certified retirement or financial advisor.