Is the monthly pension paid under EPS just?

The government has fixed the monthly pension benefit at 1,000 INR from the financial year 2014-15. Those who started job after 1 Sep 2014 and earning more than 15,000  INR in basic and DA will not be contributing to the Pension Scheme. Before Sep 1, 2014, it was Based on a maximum employment period of 35 years, and a maximum contribution of Rs 6500, the maximum amount of pension as per the Pension formula would be = 6500 * 35)/70 = Rs 3,250 per month or  Rs. 39,000(3250 * 12) per year. Our article How to calculate your pension under EPS will explain the same in detail

  • Maximum Pension one can get is 7,500 INR per month.
  • Minimum Pension one can get is 1,000 INR per month.

Is the Monthly Pension paid under EPS just?

The amount of pension is meager. If one would have invested 541 INR in a Debt Mutual Fund at the rate of 8% for 35 years one would get 12,49,263 as maturity amount. If this maturity amount is put in buying the Pension plan and put the above amount 12,49,263 INR in the premium calculator of LIC with an option as Annuity payable for life, one would get a monthly pension of 10,150 INR which is much more than 3250 INR.

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