Employees Pension Scheme (EPS)
The difference between EPF and EPS is widely misunderstood, and both are mistaken for one another. We will explain what EPS is, how many types of pension schemes are available in EPS, how much of your pay goes to EPF, how much pension you will receive from EPS (Pension under EPS), and how to withdraw money from your EPS account in this post. (How to Take Money Out of an EPS Account).
EPFO manages the Employees’ Pension Scheme (EPS), which is a retirement plan. This scheme is for retired organized-sector personnel who have reached the age of 58. However, this scheme’s advantage can only be obtained if the employee has worked for the company for at least 10 years (not necessarily on his own continuous basis). EPS was established in 1995, and it was open to both existing and new EPF members.
The employee and the employer/company both contribute 12 percent of the employee’s salary to the EPF fund. However, the EPF receives the entire employee contribution, while the employer/company contributes 8.33 percent to the Employees’ Pension Scheme (EPS) and 3.67 percent to the EPF each month.
Eligibility Conditions for the Employees Pension Scheme (EPS)
- To be eligible for benefits under the Employees’ Pension Scheme (EPS), a person must meet the following criteria:
- EPFO membership is required.
- You have worked for ten years and are 58 years old.
- You can begin taking money from EPS at the age of 50, but the amount will be less.
- You can delay your pension for two years (up to the age of 60), after which you will receive a pension at a rate of 4% per year.
Also Read: Severance Package for Lay off Employees
How to Figure Up Your EPS Pension
The amount of the PF pension is determined by the member’s pensionable pay and pensionable service, or how many years the job has been done. The member’s monthly pension amount is computed using the formula below:
Employee’s Monthly Wage = Pensionable Wage X Pensionable Service /70 Pensionable Wage:
An employee’s average monthly wage for the last 60 months before leaving EPS is his pensionable salary.
The advantage of such days will still be given to the employee if you have not contributed to the EPS account for a few days in the last 60 months of employment. If a person begins working on the 3rd of the month, he will be paid for 28 days at the end of the month, but his EPS contribution will only be for 30 days.
If a person’s monthly income is Rs 15,000, his or her salary for the next 28 days is Rs 14,000 (less than Rs 500 per day for two days). EPS, on the other hand, considers a monthly salary of Rs 15,000 for a period of 30 days.
The maximum monthly pensionable wage is Rs 15,000 rupees.
Because the employer/company contributes 8.33 percent of the employee’s salary to the EPS account each month, the amount deposited in the EPS account each month is
15000 X 8.33 /100 = 1250
Pensionable Service: Your pensionable service is determined by the amount of time you have served. When calculating your pensionable service period, the amount of time you have worked for several companies/institutions is added together. When an employee moves positions, he is needed to obtain an EPS scheme certificate and present it to the new organization/company.
Keep in mind that after 20 years of service, the employee receives a two-year bonus.
If a member withdraws his EPS fund before finishing his 10-year service tenure or joining another firm, he will have to begin contributing to the EPS account all over again, and his service period will begin at zero.
The pensionable service duration is calculated using a 6-month service period. Six months of pensionable service is the bare minimum. The pensionable service duration is regarded to be 8 years and 2 months if the total service time is 8 years and 2 months. If the service length is 8 years and 10 months, the pensionable service time is calculated as 9 years.
Benefits from the Employees’ Pension Scheme (EPS)
From the moment they begin withdrawing pension, all EPFO members who are qualified might get a pension based on their age. The amount of the pension varies from instance to case.
1) When You Retire At The Age Of 58, You Will Receive A Pension
After reaching the age of 58, a member can begin receiving pension payments. The member must, however, have served for ten years till he reaches the age of 58. An EPS Scheme Certificate is produced, which can be used to complete and submit Form 10D in order to receive a monthly pension.
2) Pension Before Being Eligible For A Monthly Pension While Leaving A Job
If a member is unable to work for ten years before reaching the age of 58, he can withdraw the entire sum by completing Form 10C when he reaches that age. Keep in mind that they will not receive a monthly pension after they retire.
3) Pension For Being Totally Incapacitated While Serving In The Military
If an EPFO member becomes completely incapacitated while still serving in the military, he is still entitled to a monthly pension. His employer/company must deposit money in his EPS account for at least one month in order for him to be eligible for a pension.
From the date of disability, the employee is entitled to a monthly pension for the rest of his or her life. However, the employee may be subjected to a medical examination to ensure that he or she is unable to perform the job they were doing prior to being incapacitated.
4) A Pension For The Employee’s Family In The Event Of His Or Her Death
- If an employee dies while on the job and the employer / company has deposited money in the employee’s EPS account for at least one month, the employee’s family may be eligible for pension payments.
- If an employee has worked for ten years but dies before he or she reaches the age of 58,
- In the event of the employee’s death after the start of the monthly pension.
Types of EPS Pension Plans
EPS offers a variety of pension plans, including those for widows, children, and orphans. This pension gives income to the EPF subscriber’s family members.
1) Pension for Widows
The widow of an eligible member is entitled to a Widow Pension or Old Age Pension (EPS Widow Pension). The widow will receive this sum as a pension until she dies or remarries. If there are multiple widows, the pension amount will be given to the widow who is older.
Table-C of the EPS, 1995 determines the amount of monthly old age pension. The current minimum pension amount is Rs.1000. Pensionable members are eligible for a stipend of Rs.6,500. The amount of a widow’s pension is computed using the table below and a pensionable wage of Rs. Explain that the monthly pensionable pay will be Rs.15,000, and that, as a result, a higher pension may be available:
|Monthly Widow Pension ( ₹ )||Monthly Pensionable Salary for Widow Pension ( ₹ )|
2) Child Pension
In addition to the monthly widow pension, the surviving children in the household receive a monthly child pension (EPS) when the member dies. This annuity will be paid to the child until he or she reaches the age of 25. The amount payable is up to 25% of the widow pension and can be split between up to two children.
3) Pension for Orphans
If a member dies without a surviving widow, his children are entitled to receive 75 percent of the monthly widow pension as a monthly orphan pension (EPS Orphan Pension). In order of greatest to least advantage, this benefit will be available to two surviving children.
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4) Reduced Pension
If an EPFO member has completed ten years of service and is between the ages of 50 and 58, he can take his pension early. In this instance, the pension amount is lowered by 4% for each year left until reaching the age of 58.
At the age of 56, the member can withdraw the decreased monthly pension and receive 92 percent (100 percent – 24) of the basic pension amount.
EPFO members and their families must complete the following documents in order to receive Employees Pension Scheme (EPS) benefits:
What is the Purpose of the EPS Form Applicant Form?
|EPS Form||Applicant||Purpose of Form|
|Form 10C||Member||Withdraw money before working for 10 years • EPS Scheme Certificate|
|Form 10D||Member||• For monthly pension withdrawal after the age of 50 years • For monthly pension for widow, child pension etc.|
|Life Certificate||Pensioner/Guardian||• The pensioner signs a form certifying that he is alive. • It has to be submitted every year in November to the manager of the bank where you have your pension account.|
|Non Re-Marriage Certificate||Widow||• certifying that the widow/widower has not remarried • It has to be give in to in November each year|
How Do I Check The Balance Of My EPS Account?
The EPF pass-book allows members to monitor the amount placed in their Employees’ Pension Scheme (EPS) account. The EPS contribution deposited by the employer/company each month is shown in the passbook’s last column. After entering in to the account with your UAN and password, you can download the passbook from the EPF passbook page.
Important Information about the EPS Pension
- The employer/company must make all contributions to the Employees’ Pension Scheme (EPS) account
- The company contributes 8.33 percent of the employee’s salary to the EPS
- The employee’s salary includes the basic salary as well as the cash value of dearness allowance, retaining allowance, and food concessions
- The employer/company must make his/her contribution within the final 15 days of each month.
- The company/employer should bear the cost of all necessary contributions.
- The main employer/company must contribute to all of its employees, either directly or through a contractor.
- If you have worked for less than 10 years but more than 6 months, you can take your EPS amount if you are unemployed for more than two months.
- According to the system, the employee’s retirement age is established at 58 years.
- After turning 58, the employee either ceases to be a member of the Pension Fund or begins receiving a reduced pension (at the age of 50).
Frequently Asked Questions (FAQS)
Where can I obtain an EPS account number?
The EPF account’s member ID also serves as the EPS account’s ID. The same member ID is used for both EPF and EPS contributions.
How do I send EPS files over the internet?
You can transfer EPS online using a composite claim form. The member must go to the EPF member portal and request an EPF transfer if they move jobs. The EPF and EPS accounts will be merged into the new one.
What does Pension Contribution mean in an EPF Passbook?
The amount placed by the company/employer in the employee’s EPS account each month is the pension contribution in the EPF passbook. It costs approximately Rs 1250 per month.
My mother receives a widow pension every month after my father’s death. Is it possible for me to get a pension as well?
If an employee dies, his widow will receive an EPS widow pension, and the employee’s surviving children will receive a monthly child pension. A maximum of two children under the age of 24 years can receive 25% of the widow pension each month as a child pension.
My parents have both passed away. Is it possible for me to receive a monthly pension?
As an orphan pension, you will get 75% of the pension sum that would have been paid to your parents.
My pension amount does not appear in my EPF passbook following the transfer, however the EPF transfer amount does. Has my EPS been transferred as well?
When you apply for a transfer, your pension and EPF funds are both transferred to your new account. The amount seems to be zero in the passbook, yet it is the same in the regional EPF office’s database.