EPFO Higher Pension Update: Retired employees are in for a treat; now they will receive double their previous pension.

EPFO Higher Pension Update: The EPFO ​​has reinstated the old higher pension rule. Employees will now be able to receive pension benefits based on their full salary. Find out what the new update is and who will benefit.

EPFO Higher Pension Update: Good news is coming for retired employees and pensioners. The EPFO ​​(Employees' Provident Fund Organization) has indicated it will reinstate the old pension rules. Employees will now be able to choose a pension based on their full salary, significantly increasing the amount they receive after retirement.

EPFO: What is this new update on higher pension?

According to recent reports, the EPFO ​​has now allowed employees to contribute to the pension fund based on their actual basic salary. Previously, this limit was fixed at ₹15,000, but now this cap is being removed, and the old system is being reinstated. This simply means that the higher your basic salary, the better your pension will be.

EPFO: What changed since the 2014 rule?

In September 2014, the government established a rule that pension calculations would be based on a maximum salary of ₹15,000. Consequently, the maximum pension received after retirement was limited to ₹7,500. Now, the restoration of the old option will provide relief to those who wanted to contribute their entire salary.

EPFO: Who will benefit from this restoration?

It's important to note that this benefit isn't available to everyone. It's primarily for employees who opted for a higher pension option before 2014. Furthermore, employer consent is required. You can only be a part of this scheme if your company agrees to contribute more.

EPFO: How is pension calculated?

The formula for calculating pension is quite simple:

Pension = (Average Salary × Years of Service) ÷ 70
Here, average salary means the sum of basic salary and dearness allowance (DA) for the last 60 months.