PF vs EPS: Understanding Your Retirement Pension Calculation
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News18•27-01-2026, 15:24
PF vs EPS: Understanding Your Retirement Pension Calculation
- •EPFO deductions split into EPF (lump sum) and EPS (monthly pension) components.
- •EPF builds a corpus for retirement, while EPS provides a fixed monthly pension after age 58.
- •Pension calculation depends on years of service and a fixed salary ceiling, not the total PF balance.
- •Employer's 12% contribution is split: 8.33% to EPS (max Rs 15,000 salary cap), 3.67% to EPF.
- •EPS offers family security: spouse gets 50% pension, children 25% each until 25, orphans 75%.
Why It Matters: EPF provides a retirement lump sum, while EPS ensures a lifelong monthly pension based on service and salary.
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