EPS Pension Calculation Formula 2025: In case you are a salaried worker with contributions to the Employees’ Provident Fund, you become a part of the Employees’ Pension Scheme. This scheme ensures a lifelong pension following retirement, thus providing financial security through the golden years. The EPS offers a regular monthly payment, whether you retire at 58 or go in for a premature retirement at 50.
EPS was launched in 1995, and it is maintained by the Employees’ Provident Fund Organisation. It acts as a post-retirement pension for employees in the organized sector. Minimum 10 years of service is essential (not necessarily continuous).
How Does Employee Pension Scheme (EPS) Work?
Since under EPF Rules, contributions are 12% of the employee’s basic salary plus DA from both the employer and employee, EPS gets 8.33% from the employer’s share and the remaining 3.67% goes to EPF.
EPS Pension Calculation Formula 2025
Your monthly pension depends on two key factors:
- Pensionable Salary – Average of last 12 months’ basic salary + DA.
- Pensionable Service – Total years of service.
EPS Pension Formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Important Note:
The maximum pensionable salary under EPS is Rs 15,000, even if your actual salary is higher (e.g., Rs 60,000).
EPS Pension Calculation for Rs 60,000 Salary (15, 20, and 32 Years of Service)
1. Pension After 15 Years of Service
- Pensionable Salary: Rs 15,000
- Service Period: 15 years
- Calculation: (15,000 × 15) ÷ 70 = Rs 3,214 per month
2. Pension After 20 Years of Service
- Pensionable Salary: Rs 15,000
- Service Period: 20 years
- Calculation: (15,000 × 20) ÷ 70 = Rs 4,285 per month
3. Pension After 32 Years of Service
- Pensionable Salary: Rs 15,000
- Service Period: 32 years
- Calculation: (15,000 × 32) ÷ 70 = Rs 6,857 per month
Note: The maximum pension under EPS is Rs 7,500, so even with 35+ years of service, the pension will not exceed this limit.
Who is Eligible for EPS Pension?
- EPF members automatically enrolled in EPS.
- Minimum 10 years of service (non-continuous allowed).
Retirement age:
- Regular Pension: 58 years
- Early Pension: 50 years (with reduced benefits)