Under EPS, those who left the scheme before 10 years were given the facility of withdrawal, but those who left the scheme before 6 months were not given the facility of withdrawal on their contribution. However, now this rule has changed.
Rule Change: The central government on Friday made changes in the Employees’ Pension Scheme (EPS), 1995. Now even members who contribute for less than 6 months will be able to withdraw money. This change will benefit lakhs of EPS employees. Actually, every year lakhs of EPS members leave the scheme before the 10 years of contributory service required for pension. In this, the number of people leaving this scheme within 6 months is more.
Under EPS, those who left the scheme before 10 years used to get the facility of withdrawal, but those who left this scheme before 6 months were not given the facility of withdrawal on their contribution. However, now by changing this rule, the government has given a big relief. The new amendment will benefit more than 7 lakh EPS members every year, who leave the scheme after less than 6 months of contributory service.
The government also changed this rule
To make the scheme better, the government has also amended the EPS details. From now on, the withdrawal benefit will depend on the number of months of service the member has put in and how much EPS contribution has been made on the salary. This rule will make withdrawal easier. This change will benefit more than 23 lakh EPS members.
What was the rule earlier?
Till now, the withdrawal benefit was calculated on the basis of the period of contributory service in completed years and the salary on which EPS contributions have been paid. Members were entitled to such withdrawal benefits only after completing 6 months or more of contributory service. As a result, members leaving the scheme before contributing for 6 months or more did not get any withdrawal benefit.
7 lakh claims rejected
Many claims were rejected due to the old rule as many members were exiting without less than 6 months of contributory service. According to the government notification, about 7 lakh claims of withdrawal benefit were rejected due to less than 6 months of contributory service during the financial year 2023-24. Now these EPS members who have not attained the age of 58 years by 14.06.2024 will be entitled to withdrawal benefits.
What is EPS?
People often get confused about EPS. Actually, it is a pension scheme, which is managed by EPFO. Under this scheme, contribution has to be made for 10 years, then you become entitled to pension after retirement. Existing and new EPF members are included under this scheme.
Both the employer/company and the employee contribute equally to the EPF fund at 12% of the employee’s salary. However, the entire share of the employee’s contribution goes to EPF and 8.33% of the employer/company’s share goes to the Employees’ Pension Scheme (EPS) and 3.67% to EPF every month. Pension benefits will be given after completing at least 10 years of service and after retirement.
