How do I secure a regular monthly income after retirement? That’s a vexing financial problem that most Indians of our generation face, after the phasing out of guaranteed pension from the Government. But one guaranteed option that remains and usually flies under the radar, is the Employees’ Pension Scheme 1995. This scheme can help employees with long years of service receive a modest but guaranteed pension throughout their retired life. EnrolmentAll organised sector employees in India who are enrolled with the Employees Provident Fund Organisation (EPFO) automatically become members of the Employees’ Pension Scheme (EPS) as well. Once you enrol in the EPF, your employer deducts 12% of your basic pay plus dearness allowance every month towards your retirement corpus, with your employer making a matching contribution. While your 12% contribution goes entirely into the EPF account which gives you a lump sum on retirement, 8.33% of your employer’s contribution goes into the EPS to fund your pension payouts post-retirement. The government also adds 1.16% of your pay to the EPS kitty every month. However, both the employer’s and the government’s EPS contribution on your behalf are subject to a pay cap. The maximum pay on which the EPS used… Read full this story
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