Employee’s Pension Scheme: Launched on November 16, 1995, the ‘Employees Pension Scheme’ is a social security initiative of the Government of India, implemented under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.
This scheme ensures financial security for employees’ families in the event of retirement, disability, or death. The main benefits include retirement pension, early pension, and family pension. Eligible employees must be members of the Employees Provident Fund Scheme, 1952, and their salary should not exceed 15,000/- per month. Here is some important information about this scheme discussed.
What is the Employees’ Pension Scheme?
The Employees’ Pension Scheme is a retirement plan managed by the EPFO, which provides a monthly pension to employees after the age of 58 based on their contributions. Both the employee and the employer contribute 12% of the employee’s basic salary to the EPF, with 8.33% of the employer’s share going to the EPS. This scheme ensures financial stability for retirees by providing a steady income after retirement.
Who is eligible for the Employee’s Pension Scheme?
The eligibility criteria for receiving EPS benefits are mentioned below:
You must be an EPFO member. Your age must be 50 years for an early pension and 58 years for a regular pension. If you defer the pension for 2 years, you will be eligible to receive an additional 4% pension per year. You must have completed at least 10 years of employment.
What are the features of the Employee’s Pension Scheme?
Some Features of the Employee’s Pension Scheme are:
Since the Employee’s Pension Scheme is a scheme of the Government of India, the returns are guaranteed, and there is no risk in investing in this scheme. The amount to be returned is fixed and does not change. You can withdraw the amount from your EPS account once you reach at least 50 years of age.
However, the amount you receive will be at a lower interest rate. Employees earning a basic salary and DA of 15,000/- or less must be enrolled in this scheme. If a member’s widow or wife remarries, the children will be classified as orphans and will receive the additional pension amount. Employees listed in the EPF project are also automatically enrolled in the EPS project.
Important link:
Official Website: Click Here
EPFiGMG Grievance Portal: Click Here
Types of Pensions under EPS
Various types of pensions under the Employee Pension Scheme are as follows:
Orphan Pension: If a member passes away without leaving a spouse, their children are eligible to receive an orphan pension equal to 75% of the monthly pension. This benefit is available for up to two surviving children, from oldest to youngest.
Widow and Widower Pension: If an EPS member passes away leaving a spouse, the widow or widower is entitled to a monthly pension. To qualify, the deceased member must have completed at least one month of service.
Child Pension: In addition to the monthly widow’s pension, a monthly pension will also be provided to the surviving children of the family. The amount payable is 25% of the widow’s pension and will be given up to the age of 25 years for the child. This amount is payable for a maximum of two children.
What are the benefits of the scheme?
The benefits of the Employee Pension Scheme are-
Provides A specified income after retirement at the age of 58 or after early retirement at the age of 50. Provides a monthly pension to members who become fully and permanently disabled, even if they have not completed the pensionable service period.
Allows withdrawal of the full pension amount at the age of 58 if the member leaves the job 10 years before reaching 58. In the event of a member’s death before or after the pensionable service period, the member’s family is provided with a pension.
