Employees’ Pension Scheme: EPFO runs the Employees’ Pension Scheme to provide pension to its members and their families or nominees. This scheme was started on 16 November 1995.
EPFO, Employees’ Pension Scheme, EPS: The Employees’ Provident Fund Organization (EPFO) runs the Employees’ Pension Scheme (EPS) for its members. Under this scheme, EPFO members get monthly pension after a period of time based on their service period and salary. The Employees’ Pension Scheme (EPS) was started by EPFO on 16 November 1995. It has replaced the Employees Family Pension Scheme 1971.
In the Family Pension Scheme, the family used to get pension only on the death of the member. At the same time, there is a provision to give pension to EPFO members in the Employees’ Pension Scheme as well. Apart from the EPFO member, the new scheme also provides for pension to the family and nominee. The objective of this scheme, which started in November 1995, is to provide regular income to the employees of the organized sector after retirement.
When do you get the benefit of Employees Pension Scheme?
To get EPS pension, EPFO members have to fulfill certain conditions. The employee has to complete at least 10 years of service. Pension is available on completion of 58 years of age. The employee must be a registered member of EPFO and must contribute regularly to the EPS scheme throughout their employment.
Let us tell you that when you start working as an employee in a company or an institution in the organized sector, you become an EPFO member. This means that a part of your salary will be deposited in EPF and EPS every month. This amount is used for the future of the EPFO member, such as getting pension after retirement or getting help in an emergency.
EPF members contribute 12% of their basic salary to the Employees Provident Fund (EPF) during the job, and the company also contributes the same amount. Let us tell you that the company’s contribution is divided into two parts. In this, 8.33% share gets deposited in EPS and 3.67% share gets deposited in EPF.
When do EPFO members become entitled to pension
As per the provisions of the Employees Pension Scheme, a member of the pension scheme becomes entitled to pension after completing 10 years of contributory membership and he can take pension on completing 58 years of age. Whether he retires from his institution or not, that is, on completing 58 years of age and 10 years of contributory membership, an EPFO member can take pension even while working.
Apart from this, if a member leaves the job after completing 50 years of age, then he also becomes entitled to take pension at a reduced rate. Provided the period of membership is at least 10 years.
Features of EPS Scheme
You can see the details about the main features of the Employees Pension Scheme below.
Minimum service period to get pension: 10 years
Age at which pension starts: 58 years
Minimum monthly pension: Rs 1,000
Maximum monthly pension: Rs 7,500
From the year 2014, the Central Government has fixed the minimum pension under EPS-1995 at Rs 1,000 per month. However, it is being demanded that this pension should be made at least Rs 7,500 per month.
How is pension calculated?
The pension is calculated on the basis of the member’s pensionable service i.e. the number of years he has contributed to the pension fund and the average salary of 60 months before retirement on a pro rata basis. If you want to know how much pension you will get, then
First of all go to the official website of EPFO www.epfindia.gov.in
Click on the EDLI & Pension Calculator option in the Online Services section visible on the left side of the screen.
A new screen will open and you can know how to use this calculator by going to How to use EDLI & Pension Calculator visible on the screen. And you can reach its home page by clicking on EDLI & Pension Calculator given on the left.
Now you can reach the calculator by clicking on the Pension Calculator tab given above.
In this, you can calculate your pension by entering your details.
If an EPFO member has completed 10 years of service, how much pension can he get on completing the age of 58 years.
EPS Pension Calculation Formula
Monthly pension is calculated using this formula:
Monthly pension = (Pensionable salary × Pensionable service) / 70
Pensionable salary: Average salary of last 60 months (maximum Rs 15,000)
Pensionable service: Total service years contributed to EPS
For example, if an employee’s pensionable salary is Rs 15,000 and he has served for 10 years, then his monthly pension will be as follows:
Monthly pension = (15,000 × 10) / 70 = Rs 2,143
This example shows that despite the minimum service period of 10 years, the employee can get pension, however if the service period is more, then the monthly pension will also be more.
So many types of pensions are available in EPS
Usually, pension is given to EPFO members on completion of 58 years of age. But if a member retires after completing 50 years of age and before completing 58 years, then he can take pension at reduced rates. The pension will be reduced by 4% per annum according to the number of years less than the age of the member in 58 years.
Superannuation pension: When a member reaches the age of 58, he gets this pension.
Early pension: Pension can be taken between 50 and 58 years, but some deduction is made in it.
Widow pension: This pension is given to the wife or husband of the member who has passed away.
Children’s pension: This pension is given to the children of the member who has passed away.
Orphan pension: This pension is given when both the parents die and the children become orphans.
Disability Pension: If an employee suffers from permanent disability, he gets this pension.
It is worth noting that if a member’s pensionable service is 20 years or more, then he is also given a bonus of 2 years.
If a member wants, he can postpone it after 58 years till the age of 60. In such a situation, he will get an increased pension of 4 percent at the age of 59 and 8 percent at the age of 60. If 10 years of pensionable service has been completed and the member is still in job after 58 years, then he can also continue contributing to the pension fund till the age of 60. In such a situation, his service and salary after 58 years will also be taken into account for calculating his pension. Due to which he will get more pension.
Benefits of EPS
EPS provides many important benefits to its members. It provides a lifetime income, due to which the employee gets pension every month after retirement. If the member dies, this scheme gives security to the family, and the family gets pension benefits. EPS also includes disability cover, which means that if an employee suffers a permanent disability, he or she gets a pension. Apart from this, EPS also has tax benefits, as the pension is exempt from income tax, making it an attractive option.
DISCLAIMER
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at informalnewz@gmail.com
