EPFO continues to bring good news to millions of employees. On September 17, the government made a major decision to raise the wage limit under the Employees' Provident Fund (EPF) and Employees' Pension Scheme (EPS) from ₹15,000 to ₹25,000 per month. Additionally, there is news that PF withdrawals via UPI are expected to commence by the end of this year.

Consequently, employees associated with EPFO ​​stand to gain a double benefit. Furthermore, the implementation of the new wage ceiling results in a direct increase of over 65% in the pension amount. So, what would the pension amount be for someone earning a salary of ₹32,000 with approximately 20 years of service? Let us understand this in detail.

Understand the benefit through the formula:
According to EPFO, the formula for EPS pension is:

Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70

*   Pensionable Salary: Based on the average salary of the last 60 months.
*   Pensionable Service: Total number of years of contribution to EPS.

What will the pension amount be after 20 years of service?
Let us consider a scenario where your pensionable salary is ₹32,000 and your contribution is based on your actual salary (which exceeds the ceiling limit); the pension calculation would be as follows:

For 20 years of service: (32,000 × 22) / 70 = ₹10,057

This means that after 20 years of service, you would receive a guaranteed monthly pension of approximately ₹10,057. Additionally, note that for service exceeding 20 years, a 'bonus service' of 2 years is added to the pension calculation.

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