If you are a salaried employee whose Provident Fund (PF) is deducted every month, this update from the Employees’ Provident Fund Organization (EPFO) is very important for you.
The EPFO has made five major changes to the Employee Pension Scheme (EPS) that will directly affect your future pension benefits.
Contents
Pension Will Now Be Based on Average Salary
Earlier, pensions were calculated based on the employee’s last drawn salary. Now, the pension will be calculated on the average salary of the last 60 months (5 years).
This change benefits employees whose salaries have gradually increased over time.
Although this rule has been in place since September 1, 2014, the EPFO has now simplified the process to ensure every employee receives the correct pension amount.
Maximum Pension Limit Increased to ₹15,000 per Month
Previously, the maximum pension was limited to ₹7,500 per month. Now, it has been increased to ₹15,000 per month, following a Supreme Court directive.
This move provides relief to retired employees who earned higher salaries but received a lower pension due to the earlier cap.
Pension Can Be Withdrawn from Age 50
The minimum age for pension withdrawal has been reduced from 58 years to 50 years.
This means employees can now start receiving their pension earlier, though the amount will be slightly reduced if withdrawn before 58.
Online Pension Claim Facility Introduced
The EPFO has made the pension claim process completely online. Employees can now fill out forms, upload documents,
and get approval through the EPFO website or mobile app.
Earlier, pension claims took several months to process, but now they can be completed within a few weeks.
Pension Will Not Be Affected by Job Change
The EPFO has made pension portability easier. When an employee changes jobs, their previous service record will automatically be added to the new job.
This ensures there is no loss of pension benefits when switching employers.