EPFO Pension: Know How You Can Get ₹15,670 Monthly

For all the private sector employees the Government manages a pension scheme on a large scale named EPF. The Employee Provident Fund scheme was introduced after the enrolment of the EPF Act in Parliament. Moreover, similar to them, Government sector employees are also eligible to get pension benefits.

EPFO Pension

As per the Law, the Employees Provident Fund Organisation is in charge of managing the large pool of funds contributed by both Employees and Employers in the permanent account numbers identified by UAN or Unique Account Number. In this account, a fixed percentage of money is contributed monthly, and a person can calculate his total savings with an EPF calculator.

So, this large pool of funds accumulated over years in your EPFO pension account provides the surety that your post-retirement life will be as wealthy as your earning days.

How the Contributions are Made Towards EPF?

Employees who are eligible under the EPF scheme contribute 12 per cent of their basic salary plus dearness allowance to the program. Over this, their employers also contribute equally, meaning 12%. Out of which 8.33% is sent to EPS and the rest 3.67% goes to the EPF account of the respective employees. So, the employers mandatorily contribute equally to the employee’s contribution under the EPF plan. Presently, an interest rate of 8.15% is being offered by the Government for FY 2022-2023. This interest rate is decided by the EPFO Central Board of Trustees after consulting with the Ministry of Finance.

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Understand the Functioning of the EPFO Calculator

“Let’s understand that with an example: Assuming the salary of an employee is 1,00,000 including DA. Employee contribution towards their EPF is 12% i.e.12,000. Now, the employer contributes 3.67% i.e., 3,670 and the employer contributes towards EPS which is 8.33% of 40,000, which is 8,330,” mentioned by DNA India.

“The total contribution by the employer and employee towards the EPF account of the employee will be 15,670. The interest rate applicable for each month is 8.15%/12 = 0.679%. The total contribution for the month of joining will be Rs 15,670,” further added.