Pension Scheme : Important Points to Know about Employer Contribution Percentage in Percentage from Basic Salary

With Respect to Pension Scheme for Indian Employees

  1. According to Provisions of Employees’ Pension Scheme, 1995 under Employees Provident Fund & Miscellaneous Provisions Act, 1952, Out of employer’s contribution of 12% of Basic Salary; Up to August 31, 2014, a sum equal to 8.33% of salary (Basic Salary) subject to maximum salary ceiling of Rs. 6500/- (i.e. Rs. 541/- per month), From September 1, 2014, a sum equal to 8.33% of salary (Basic Salary) subject to maximum salary ceiling of Rs. 15000/- (i.e. Rs. 1250/- per month), is remitted to Regional Provident Fund Commissioner (RPFC) as Pension contribution under Employees’ Pension Scheme.
  2. While Pension transfer-in is effected from the previous pension account to the current pension account, it is the Pensionable Service which is transferred and not the Pension contribution.The Pensionable Service in years is the factor considered for calculating the pension amount payable to the member upon separation.
  3. For International workers (Indian who working in Onsite) ,8.33% of entire basic salary will be paid by employer to regional provident fund office as Pension Fund contribution under Employee Pension Scheme.