While Government sector employees do not receive pension benefits after retirement, private sector employees are eligible to receive them through the Employee Provident Fund (EPF) scheme, which was introduced by the parliament under the EPF Act.
Under this scheme, both employers and employees contribute to the employee’s permanent EPF account, which can be accessed and managed through a unique account number or UAN.
The EPF scheme is a retirement plan that involves monthly contributions from employees, along with an annual interest rate offered by the EPFO.
It’s understandable to be curious about the accumulated amount that will be available at the time of retirement, which is why it’s recommended to calculate the estimated monthly pension that will be received through the EPF scheme.
This calculation is not only useful for retirement planning, but it also helps in understanding the benefits of the EPF scheme as a long-term investment.
How to Get ₹7,200 as Monthly Pension From EPFO?
As per the law, both employees and employers are required to make monthly contributions of 12 percent of the employee’s basic salary towards the EPF scheme.
The accumulated amount in the EPF account is managed and monitored by the Employees’ Provident Fund Organisation (EPFO), which ensures the transparency and security of the retirement scheme transactions.
This authority plays a crucial role in maintaining the integrity and credibility of the EPF scheme.
To determine the estimated monthly amount that will be received after retirement and potentially increase it to ₹7,200, one can utilize the EPF calculator.
How to Use an EPF Calculator?
- First, enter what’s your basic salary and age.
- Then you will see the following details: “employer’s contribution (EPS+EPF), total interest earned, and total maturity sum.”
How Does the EPF Calculator Work?
Beginning with the fundamental concepts, an EPF account receives monthly contributions from an employee, which is equivalent to 12 percent of their basic salary.
Therefore, for example, if an employee’s basic salary is Rs. 60,000 (excluding any DA), their monthly EPF contribution would be Rs. 7,200.
