The Employees’ Pension Scheme (EPS), managed by the Employees’ Provident Fund Organisation (EPFO), is one of India’s most important retirement support systems for salaried employees. Millions of workers depend on EPS to ensure a stable monthly income after retirement. However, very few people clearly understand how the pension is calculated, how many years of service are required, and what amount they can expect at the age of 58.
If you have worked for 15 years and want to know how much pension you will receive after age 58, this detailed article will explain the complete calculation in a simple and clear way.
Understanding EPFO Pension (EPS)
EPS provides a lifelong pension to eligible employees after retirement. Every month, the employer contributes 8.33% of your basic salary + DA into the pension fund (subject to wage limit rules). The monthly pension you receive at 58 depends on:
Pensionable Salary (Average of last 60 months’ basic + DA)
Pensionable Service (Total number of years worked, minimum 10 years required)
EPS Formula for calculation
Let’s break these down.
Key Concepts for EPFO Pension Calculation
1. Pensionable Salary
This is the average of your last 60 months’ basic salary plus dearness allowance (DA).
For most employees under EPS, the maximum salary considered is ₹15,000 due to the wage ceiling.
2. Pensionable Service
This is the total number of years you contributed to EPS.
Minimum service required for pension = 10 years
Extra bonus: If your service is more than 20 years, you get +2 bonus years
But in this example, the person has worked 15 years, so no bonus years apply.
3. EPS Formula
EPFO uses a simple formula for calculating pension:
Monthly Pension = (Pensionable Salary × Pensionable Service) / 70
Now let’s apply this for a person who has 15 years of service.
EPFO Pension Calculation for 15 Years of Service
We will calculate pension under two scenarios:
If the employee’s last 5-year average salary = ₹15,000
If the last 5-year average salary = less than ₹15,000
Most EPS members fall under the first case (₹15,000 ceiling).
Case 1: Pensionable Salary = ₹15,000
Using the EPS formula:
Step-by-step Calculation:
Pensionable Salary = ₹15,000
Pensionable Service = 15 years
Monthly Pension = (15,000 × 15) / 70
= (2,25,000) / 70
= ₹3,214 per month (approx.)
So, after age 58, a person with 15 years of service and a maximum salary of 15,000 will receive around:
👉 ₹3,200 per month pension.
Case 2: Pensionable Salary = ₹10,000
If your salary was lower, say ₹10,000, the calculation becomes:
Monthly Pension = (10,000 × 15) / 70
= 1,50,000 / 70
= ₹2,142 per month (approx.)
So, pension will be around:
👉 ₹2,100 per month
Why Pension Amount Is Low?
Many people are surprised to see that the EPS pension is quite low, even after years of service. The reason is simple:
1. EPS has a very low wage cap (₹15,000)
No matter how much your actual salary is, EPS counts only ₹15,000.
2. Employer contribution to EPS is small
Only 8.33% of ₹15,000 goes to EPS, which is just ₹1,250 per month.
3. EPS is a defined-benefit scheme
The formula is fixed. You get a fixed pension, not linked to your PF balance.
4. Short service duration
With only 15 years of service, the pension amount remains limited.
Longer service = higher pension.
How Much Pension If You Work for More Years?
Here is a quick comparison:
Years of Service Monthly Pension (₹15,000 salary)
10 years ₹2,142
15 years ₹3,214
20 years ₹4,285
25 years ₹5,357
30 years ₹6,428
35 years ₹7,500
Maximum pension possible is around ₹7,500–₹9,000, depending on service.
What If You Leave Job Before 10 Years?
If your service is less than 10 years, you will not receive monthly pension.
Instead, you get a withdrawal benefit (lump sum) based on EPFO’s table.
But once you cross 10 years → You must take monthly pension only after 58.
When Will You Start Getting the Pension?
You become eligible for pension at:
Age 58 (full pension)
Age 50 to 57 (reduced pension, about 4% deduction per year)
Deferred pension up to age 60 (increases by 4% per year)
EPS Pension Is Lifetime – and for Spouse Too
One major advantage is:
You receive pension for life
After your death, your spouse receives 50% of your pension
Children also get benefits (up to age 25)
This makes EPS valuable despite the low pension amount.
Conclusion
If you work for 15 years and retire at 58, your EPS pension will depend mainly on your salary (capped at ₹15,000) and service years. Using the official EPFO formula:
👉 Monthly Pension = ₹3,200 (approx.) for 15 years of service
👉 Lower salary means around ₹2,000 – ₹3,000 pension
Although the pension amount is not high, it guarantees lifelong financial support and family protection, making EPS an important safety net for every salaried employee in India
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