The monthly salary limit for joining the Provident Fund (PF) scheme has been increased from Rs 6,500 per month to Rs 15,000 per month. Secondly, those people whose monthly salary was more than Rs 15,000 at the time of joining the scheme were stopped from joining the pension scheme. For the purpose of EPS scheme, salary is considered as basic wage plus dearness allowance (DA). So, according to the amended rules, if an individual's basic wage plus DA exceeds Rs 15,000 a month, then he will not be eligible to join the EPS scheme.
What is EPF
EPF Pension which is technically known as Employees’ Pension Scheme (EPS), is a social security scheme provided by the Employees’ Provident Fund Organisation (EPFO). The scheme makes provisions for employees working in the organized sector for a pension after their retirement at the age of 58 years. However, the benefits of the scheme can be availed only if the employee has provided a service for at least 10 years.
Eligibility Criteria for EPF
He should be a member of EPFO.
He should have completed 10 years of service.
He has reached the age of 58.
He can also withdraw his EPS at a reduced rate from the age of 50 years.
He can also defer his pension for two years (up to 60 years of age) after which he will get a pension at an additional rate of 4% for each year.
How to calculate pension
After retirement, how much pension you will be given every month under EPS depends on how much your salary amount has been eligible for pension. Also, for how many years you have rendered pensionable services. Monthly pension amount of any PF PF account holder member is calculated by this formula. In this, pension = Salary X is made on the basis of year of service / 70. The pensionable salary of any PF account holder is equal to the average of his monthly salary of one year i.e 12 months.