(EPFO Allowance Yojana) : The Employees’ Provident Fund Organisation (EPFO) pension scheme is a crucial retirement benefit for salaried employees in India. Many individuals wonder how much pension they will receive after working for 10 years. The Employees’ Pension Scheme (EPS), managed by EPFO, provides lifelong financial security to eligible employees. In this article, we will break down the benefits, eligibility criteria, and pension calculation based on different salaries.
Understanding EPFO Pension: How It Works
The EPFO pension is governed by the Employees’ Pension Scheme (EPS), 1995, which ensures financial support after retirement. Here’s how it works:
- Eligibility: An employee must complete at least 10 years of service to qualify for pension benefits.
- Contribution: The employer contributes 8.33% of the employee’s basic salary (up to ₹15,000) towards EPS.
- Pension Start Age: The pension is typically available from the age of 58 years. However, an early pension option is available from 50 years with a reduced amount.
- Lifelong Pension: After retirement, the pension amount is paid monthly to the eligible employee.
The pension amount depends on the salary, years of service, and the pension formula, which we will discuss in the next sections.
How Much Pension Will You Get After 10 Years of Service?
The monthly pension is calculated using the following formula:
Pension Amount = (Pensionable Salary × Pensionable Service) ÷ 70
Where:
- Pensionable Salary = Average monthly basic salary of the last 60 months (capped at ₹15,000)
- Pensionable Service = Number of years in service (minimum 10 years)
Now, let’s see how much pension an employee would receive after 10 years of service:
| Basic Salary (₹) | EPS Contribution (₹/month) | Total Contribution (10 years) | Monthly Pension (₹) |
|---|---|---|---|
| 10,000 | 833 | 1,00,000 | 1,428 |
| 12,000 | 833 | 1,00,000 | 1,714 |
| 15,000 (max limit) | 1,250 | 1,50,000 | 2,142 |
| 18,000 | 1,250 | 1,50,000 | 2,142 |
| 20,000 | 1,250 | 1,50,000 | 2,142 |
Note: Even if your salary is above ₹15,000, EPS considers only ₹15,000 for pension calculations.
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EPFO Pension Benefits After 10 Years of Service
Completing 10 years of service under EPS makes an employee eligible for various pension benefits. Here are some key advantages:
1. Lifelong Monthly Pension
- After 10 years, an employee gets a guaranteed pension for life, starting from the age of 58 years.
- The pension amount will continue even if the employee lives beyond 80+ years.
2. Early Pension Option
- Employees can opt for early pension from 50 years, but the amount is reduced by 4% per year before 58 years.
3. Family Pension in Case of Death
- If the pensioner passes away, the spouse or nominee continues to receive a pension under the EPS Family Pension Scheme.
4. Disability Pension
- If an employee becomes permanently disabled, they can claim a pension irrespective of years of service.
5. Commutation Option
- Employees can choose to withdraw 1/3rd of their pension as a lump sum and receive the remaining amount monthly.
Who Can Apply for EPFO Pension?
To receive an EPFO pension, the employee must meet these conditions:
| Criteria | Details |
|---|---|
| Minimum Service Years | 10 years of continuous service |
| Pension Start Age | 58 years (early pension from 50 years) |
| EPS Contribution | Employer must contribute 8.33% of salary |
| Max Pensionable Salary | ₹15,000 per month |
How to Claim EPFO Pension?
If you have completed 10 years of service, follow these steps to apply for an EPFO pension:
- Ensure UAN Activation – Your Universal Account Number (UAN) should be active and linked to Aadhaar and bank details.
- Download Form 10D – This is the official EPS pension claim form.
- Fill in the Required Details – Include service history, bank details, nominee details, etc.
- Submit at Nearest EPFO Office – Attach the required documents and submit them at your regional EPFO office.
- Receive Pension Approval – After verification, EPFO will approve your pension and start monthly payments.
EPFO Pension Withdrawal vs. Monthly Pension: What Should You Choose?
Employees who leave the job before 10 years of service can withdraw their EPS amount, while those completing 10+ years must take a pension. Here’s a comparison:
| Option | Benefits | Drawbacks |
|---|---|---|
| EPS Withdrawal | Lump sum amount received before retirement | No lifelong pension benefits |
| Monthly Pension | Guaranteed pension for life | Limited pension amount |
If you plan to retire early, you may choose EPS withdrawal. However, if long-term financial security is your goal, opting for a monthly pension is better.
The EPFO pension scheme offers a lifelong pension benefit after 10 years of service, ensuring financial stability post-retirement. While the pension amount may not be very high, it provides a secure income source. Employees should consider maximizing their service years to increase their pension amount.
If you have worked for 10+ years, ensure you claim your EPS pension timely to enjoy its full benefits. If you are unsure about your pension amount, you can check your EPFO passbook or consult the EPFO office.