In this article, we will explain what Employees’ Pension Scheme (EPS) is, the various types of pension schemes available under it, what portion of your salary is deposited into your EPF account, how much pension you can expect to receive under EPS, and how you can withdraw funds from your EPS account.
What is the Employees’ Pension Scheme (EPS)?
The Employees’ Pension Scheme (EPS) is a retirement scheme administered by the EPFO. This scheme is designed for retired employees who have worked in the organized sector and have retired at the age of 58. However, the benefits of this scheme can be availed only if the employee has completed a minimum of 10 years of service (which need not necessarily be continuous). The EPS was launched in 1995, and both existing and new EPF members were eligible to join the scheme.
Both the employer/company and the employee make equal contributions of 12% of the employee’s salary to the EPF fund. However, while the employee’s entire contribution is credited to the EPF, 8.33% of the employer’s/company’s share is directed towards the Employees’ Pension Scheme (EPS), and the remaining 3.67% is credited to the EPF on a monthly basis.
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Employees’ Pension Scheme (EPS): Eligibility Criteria
- To avail of benefits under the Employees’ Pension Scheme (EPS), an individual must fulfill the following conditions:
- You must be a member of the EPFO.
- You must have completed 10 years of service.
- You must be 58 years of age.
- You may begin withdrawing funds from the EPS upon attaining the age of 50.
- You have the option to defer your pension for a period of two years (until the age of 60), after which you will receive your pension at an enhanced rate of 4% per annum.
Pension Benefits under the Employees’ Pension Scheme (EPS)
All eligible members of the EPFO can avail of pension benefits—commencing from the time they begin drawing their pension—based on their age. The pension amount varies from case to case.
1) Pension upon Retirement at Age 58
A member may begin receiving pension benefits after retiring at the age of 58. However, to qualify, the member must have completed at least 10 years of service by the time they reach the age of 58. An EPS Scheme Certificate is issued, which can be utilized to fill out Form 10D—the form submitted to claim the monthly pension.
2) Pension upon Leaving Service Before Qualifying for a Monthly Pension
If a member is unable to complete 10 years of service before reaching the age of 58, they may withdraw the entire accumulated amount by filling out Form 10C upon attaining the age of 58. It should be noted that, in this instance, they will not be entitled to receive a monthly pension benefit after retirement.
3) Pension in Case of Total Disability While in Service
If any EPFO member becomes totally disabled—even if they have not completed the full pensionable service period—they are still entitled to receive a monthly pension. To qualify for this pension, their employer/company must have contributed funds to their EPS account for a minimum period of one month.
The employee becomes eligible to receive the monthly pension from the date of their disability, and the pension is granted for their lifetime. However, a medical examination of the employee may be conducted to verify that the member is indeed unable to perform the job they were undertaking prior to their disability.
4) Family Pension upon the Death of the Employee
The employee’s family may receive pension benefits in the following instances:
- If the employee passes away while still in service, provided that the employer/company has contributed funds to the employee’s EPS account for at least one month;
- If the employee has completed 10 years of service but passes away before reaching the age of 58;
- In the event of the employee’s death after the monthly pension payments have already commenced.
How to Check the Balance of an Employee Pension Scheme (EPS) Account?
Members can check the accumulated balance in their Employee Pension Scheme (EPS) account through their EPF passbook. The final column of the passbook displays the EPS contributions deposited by the employer/company each month. The passbook can be downloaded after logging into the account on the EPF passbook portal using one’s UAN and password.
Important Points Regarding the Employees’ Pension Scheme (EPS)
- All contributions made to an Employees’ Pension Scheme (EPS) account must be made solely by the employer/company.
- The company contributes 8.33% of the employee’s salary to the EPS.
- An employee’s salary comprises their Basic Salary, along with Dearness Allowance, Retaining Allowance, and the cash value of food concessions.
- The employer/company is required to remit their contribution within the last 15 days of every month.
- The entire cost of all contributions is borne by the company/employer.
- The principal employer/company is required to make contributions for all employees working under them—whether directly or through a contractor.
- The minimum qualifying service period required to avail of pension benefits is 10 years.
- If you have completed a service period of less than 10 years but more than 6 months, you may withdraw your EPS accumulation if you remain unemployed for a period exceeding two months.
- As per the scheme, the retirement age for an employee is fixed at 58 years.
- An employee ceases to be a member of the Pension Fund upon attaining the age of 58, or upon commencing the receipt of a reduced pension (at the age of 50).
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FAQs
How do I transfer my Employees’ Pension Scheme online?
An online transfer of EPS can be initiated using the Composite Claim Form. The member must log in to the EPF Member Portal and apply for an EPF transfer upon changing jobs.
Where can I find my EPS Account Number?
The Member ID associated with your EPS account also serves as the EPS Account ID. Both your EPF and EPS contributions are deposited under the same Member ID.
What does ‘Pension Contribution’ in the EPF Passbook represent?
In the EPF Passbook, the ‘Pension Contribution’ refers to the amount deposited monthly into the employee’s EPS account by the company (employer). This amount is approximately ₹1,250 per month.