The Supreme Court on Monday gave a major relief to private sector employees by dismissing EPFO’s plea against the HC ruling that had asked the organisation to pay full pension to retiring employees on the basis of their total salary. Watch this video to know more.

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LEARN MORE ABOUT: Retirement Pension Plans

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The Employees’ Provident Fund Organization (EPFO) is a government agency in India that manages the pension funds of employees in the organized sector. It aims to provide financial security to employees after retirement and offers various benefits, including a pension scheme for private employees.

EPFO pension scheme is available to all private sector employees who are members of the Employees’ Pension Scheme (EPS). The scheme is a social security initiative designed to provide a regular income to employees after they retire. It is a contributory scheme, where both the employee and employer contribute a certain percentage of the employee’s salary towards the pension fund.

Here is all you need to know about the EPFO pension scheme for private employees:

Eligibility: To be eligible for the EPFO pension scheme, employees must be members of the Employees’ Pension Scheme (EPS). The scheme covers employees who are not covered by any other pension scheme. Employees must also have completed at least 10 years of service to be eligible for the pension.

Contribution: Both the employee and employer contribute a certain percentage of the employee’s salary towards the pension fund. The current contribution rate is 8.33% of the employer’s contribution towards EPS, subject to a maximum amount of Rs.15,000 per month.

Pension calculation: The pension amount is calculated based on the employee’s monthly average salary and the number of years of service. The pension is calculated as 2% of the average salary for the first 20 years of service, and 1% for each additional year of service beyond 20 years.

Types of pension: There are three types of pensions available under the EPFO pension scheme – superannuation pension, reduced pension, and early pension. Superannuation pension is available to employees who retire after the age of 58, reduced pension is available to employees who retire before the age of 58, and early pension is available to employees who retire before the age of 50 due to permanent disability.

Benefits: The EPFO pension scheme offers financial security to employees after retirement. It provides a regular income to employees to help them maintain their standard of living after they stop working. The scheme also provides benefits to the family of the employee in case of the employee’s death.

EPFO pension scheme for private employees is a valuable social security initiative that provides financial security to employees after retirement. By contributing towards the pension fund, employees can secure their future and ensure a comfortable retirement.