EPFO Pension: If the wage limit is increased to 30,000, what will be the minimum pension for those working in private sector jobs?

EPFO Pension: Employees working in the private sector receive a pension under the EPFO ​​scheme. For this, they have to contribute to their Provident Fund (PF). The PF money is deposited in two parts: one part is deducted from the employee's salary, and the other part is contributed by the employer. A portion of the employer's contribution goes to the EPS (Employee Pension Scheme). However, there is a fixed limit on how much PF can be deducted from your salary. Due to this fixed limit, the contribution to EPS is also limited, which directly impacts the pension amount.

Currently, the EPFO ​​wage limit is ₹15,000. This means that regardless of your actual salary, the PF deduction is calculated based on a basic salary of ₹15,000. 12% of this amount is deducted and deposited into the PF account. The Supreme Court has directed the central government and EPFO ​​to increase this limit.

So, the question arises: if the wage limit is increased to ₹30,000, how much monthly pension can private sector employees expect? Let's find out.

What are the current minimum and maximum pensions under EPS?
Currently, private sector employees receive a minimum pension of ₹1000 and a maximum of ₹7500 under the EPS scheme. This means that if you have fulfilled the pension conditions, you can receive a maximum pension of ₹7500 under this scheme. An increase in this pension is also being considered. If the basic salary, i.e., the wage limit for PF, is increased to ₹30,000, the pension amount could increase.

How is the pension calculated?
The amount of pension received under EPFO ​​is calculated using a formula:

EPF Pension Formula: Pensionable Salary × Pensionable Service / 70

Here, the pensionable salary is the average of your basic salary and dearness allowance for the last 60 months (limited to ₹15,000 for standard calculation), and pensionable service is the total number of years of your contribution.

Currently, the maximum pensionable salary remains ₹15,000, and the maximum number of years is 35. However, if the minimum wage limit is increased to 30,000 rupees, the pension received under EPFO ​​could also increase. Under this revised formula, the maximum pension could be 15,000 rupees, and the minimum pension could be 4,285 rupees.

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