If you’re part of the Employees’ Provident Fund (EPF) and wondering about your pension under the Employees’ Pension Scheme (EPS), especially at the age of 60, you’re asking a very relevant question. The EPF pension at 60 is a financial benefit that many retirees look forward to, as it provides regular income after retirement. Let’s unpack how this pension is calculated, why waiting until 60 can be beneficial, and what factors influence the pension amount you receive.
What Is EPF Pension?
The EPF pension is a monthly payment that you receive after retirement under the EPS, which is a part of your overall provident fund contributions. It acts as a social security benefit, ensuring you have a steady income once you leave the workforce. The pension depends on your पेंशन योग्य वेतन (pensionable salary), the number of years you’ve contributed to EPS (the pensionable service), and the age at which you start the pension.
How Is EPF Pension Calculated?
The key to understanding how much pension you get lies in the simple formula used by EPFO:Monthly Pension=Pensionable Salary×Pensionable Service70Monthly Pension=70Pensionable Salary×Pensionable Service
- Pensionable Salary is the average of your last 60 months’ salary before retirement, subject to a ceiling of ₹15,000.
- Pensionable Service is the total number of years you contributed to EPS, capped at 35 years.
So, if your pensionable salary is ₹15,000 and you have a full 35 years of service, your pension will be:15,000×3570=₹7,500 per month7015,000×35=₹7,500 per month
This is the maximum pension one can get under EPS without considering any increments.
Also Read- EPF Rules: Is It Possible to Maintain 2 PF Accounts?
Why Claim Pension at Age 60?
You might know the pension can be started as early as 58, but waiting till 60 can increase your EPF pension. The government provides an 8% increment on your calculated pension amount if you start receiving it at 60 instead of 58. This means your pension isn’t just ₹7,500 but ₹8,100 at 60, giving you extra financial comfort.
Here’s a quick breakdown:
- At 58: Standard pension amount.
- At 59: 4% higher than the pension at 58.
- At 60: 8% higher than the pension at 58.
This benefit encourages delayed withdrawal, boosting your monthly income in retirement.
Minimum and Maximum EPF Pension
EPFO guarantees a minimum pension of ₹1,000 per month to pensioners. On the higher side, the maximum pension is ₹7,500 based on the ₹15,000 salary cap and 35 years of service, plus the 8% increment if claimed at 60.
Important Things to Keep in Mind
- You need a minimum of 10 years of pensionable service to qualify for the EPF pension.
- If your service duration or pensionable salary is lower, pension amounts will be lower too.
- The pension is lifelong and after the pensioner’s death, a family pension is available to eligible dependents.
- Sometimes, you might have multiple EPS accounts if you switched jobs, but your pension amount is calculated by merging all contributions.
