Usually, the employees covered under the Employees Pension Scheme (EPS) know they are eligible to get a pension from retirement age.
However, many people need to learn that if they have been covered under the Employees’ Provident Fund (EPF) for more than 20 years, they are also entitled to the bonus.
This bonus is given in the form of additional service years as specified under the pension scheme.
Once this bonus is added to your service years, it increases the pension amount that you are eligible to receive.
Experts say, ‘If an employee has served 20 years or more under the EPF scheme, then two years are added to the service period.
This service period can be with one employer or with different employers. Provided they are covered under the EPF scheme
Note that the maximum service period under EPS is 35 years.
How Bonus Year Contributes To Your EPS Pension Amount
An employee eligible for the bonus will get a higher pension if bonus service years are added to his service.
This is done by calculating under (Pensionable Salary X Pensionable Service Years)/70.
For example, an employee has worked for 21 years with multiple employers while continuously contributing to EPF and EPS accounts.
As per the EPF law, the maximum limit of pensionable salary is Rs 15,000. Eligible pension amount Rs. 4,500 – (15,000X21)/70.
Now, if bonus service years (2 years) are added to the pensionable service years, the pension amount will become Rs.4,929 – (15,000X23) / Rs.70.
Due to the addition of bonus service years, the pension amount has increased by Rs.429.
