What is Employee Pension Scheme (EPS)?
Ans – EPS is a scheme governs by the Employee’s Provident Fund Organization (EPFO), which aims to gives at social security to employees. This scheme is for pension of the employees working in the organized sector, after their retirement at 58 years. The advantages or benefits of this scheme are only to be availed if the employee has served for a minimum of (continuous or non-continuous) 10 years. EPS pension was made available from 1995 and later retained for existing and newly joined EPF employees since. The scheme starts generating the monthly pensions once the beneficiary reaches the retirement age of 58. Government has introduced the EPS Scheme in 1995.
· Eligibility criteria to avail the benefits of EPS Scheme
1. Employee’s earning (Salary) should be Rs 15,000/- or less each month,
2. Employee should be an EPFO member.
3. Employee should be 50-58 years old or above.
4. Employee should have been in the service for minimum 9.5 years, not necessarily continuously.
Note 1: The employer contributes 8.33% of the employee’s Salary (Basic Pay + DA) towards the EPS account.
Note 2: If an individual has not finished 10 years but has completed a minimum of 6 months of service, he or she could withdraw the EPS pension amount if they are unemployed for 2 or more months.
Note 3: If Employee completed services of 10 years then he can withdraw pension fund by filling Form 10C.
Note 4: Employee can expect pension amount from Rs 1000 to Rs 7500.
Note 5: As per the law, pensionable service must be rounded to the nearest year. This means
Note 5: Widow, Child, Orphan and more Pension scheme Covered under EPS scheme.
that if the service is 6 months or more than it shall be treated as one year, and if the service is
less than six months those six months will not be counted.
services, employee must be completed his minimum 6 month’s duration in services.
can withdraw his EPS amount. For withdrawing EPS amount without completed 10 years in
Note 5: If Employee not completed minimum 10 years then he is not eligible for Pension but he
Note 6: On EPS amount interest rate is not applied.
Note 7: If a member employee decides to withdraw the pension before reaching the age of 58,
he or she will receive the pension at a reduced rate of 4% per year. This is termed as the reduced pension.
· Calculation of EPS Amount
