EPS: Types, Eligibility, Calculation
EPS: Types, Eligibility, Calculation
May 10, 2023
5 Minutes
Unlocking the Benefits of EPS 95: Your Guide to Employee Pension Scheme
The Employee Pension Scheme (EPS) 1995, or EPS 95, stands as a significant social security initiative introduced by the Employees’ Provident Fund Organization (EPFO) on 19th November 1995. Crafted to serve the retirement needs of employees, EPS is a vital component managed and administered by EPFO. This comprehensive guide sheds light on the nuances of EPS, from its contributions to the recent updates and the array of pensions it offers.
Understanding EPS Contributions:
EPS 95 operates on a dual contribution mechanism, involving both employers and employees. Both parties contribute 12% of the employee's wage, encompassing the basic salary and DA. Notably, 8.33% of the employer's contribution directly fuels the EPS, while the remaining 3.67% channels into the Employees’ Provident Fund (EPF).
Recent Updates on EPS Pension:
In a significant development announced by the Ministry of Labour & Employment on 3rd May 2023, individuals opting for a higher EPS pension are relieved from contributing to it. Instead, the additional 1.16% of the salary, surpassing the wage ceiling, now gets deducted from the employer's 12% contribution. Excitingly, the deadline for applying for an upgraded pension has been extended until 26th June 2023.
Calculating EPS Pension:
The pension calculation under EPS 95 is contingent on the average basic salary over the last 5 years and the cumulative service duration. The pensionable salary, derived from the average monthly salary withdrawn by the member in the 12 months preceding EPS exit, now sees an enhanced maximum cap of ₹15,000 monthly. The pensionable service period considers the entirety of a member's service, with a bonus of 2 years after completing 20 years of service. The minimum pensionable service period is 6 months.
Diverse Pension Types under EPS:
EPS unfolds various pension categories, catering to widows, children, and orphans. Widows receive pension benefits until their demise or remarriage, with the eldest widow taking precedence in case of multiple widows. Children are eligible for a monthly pension until the age of 25, in addition to the widow pension. Orphan pension supports children in the absence of a surviving widow. A reduced pension can be availed if the member has 10 years of service and is aged between 50 and 58.
Application Process and Forms:
To harness EPS benefits, members navigate through a series of forms:
Form 10C: For withdrawal before completing 10 years of service.
Form 10D: For monthly pension withdrawal after reaching 50 years.
Life Certificate: Certifying the pensioner's continued existence.
Non-Remarriage Certificate: Essential for widows/widowers.
Benefits of EPS 95:
EPS unfolds a spectrum of benefits, including:
A fixed income post-retirement.
Monthly pension for disabled members.
Complete pension withdrawal at 58.
Pension provision for the member's family in case of the member's demise.
EPS 95 emerges as a cornerstone, fostering financial security for employees in their post-retirement phase. Dive into the comprehensive scheme and unlock the multitude of advantages it offers. Secure your retirement with EPS 95, a cornerstone of financial well-being.
Unlocking the Benefits of EPS 95: Your Guide to Employee Pension Scheme
The Employee Pension Scheme (EPS) 1995, or EPS 95, stands as a significant social security initiative introduced by the Employees’ Provident Fund Organization (EPFO) on 19th November 1995. Crafted to serve the retirement needs of employees, EPS is a vital component managed and administered by EPFO. This comprehensive guide sheds light on the nuances of EPS, from its contributions to the recent updates and the array of pensions it offers.
Understanding EPS Contributions:
EPS 95 operates on a dual contribution mechanism, involving both employers and employees. Both parties contribute 12% of the employee's wage, encompassing the basic salary and DA. Notably, 8.33% of the employer's contribution directly fuels the EPS, while the remaining 3.67% channels into the Employees’ Provident Fund (EPF).
Recent Updates on EPS Pension:
In a significant development announced by the Ministry of Labour & Employment on 3rd May 2023, individuals opting for a higher EPS pension are relieved from contributing to it. Instead, the additional 1.16% of the salary, surpassing the wage ceiling, now gets deducted from the employer's 12% contribution. Excitingly, the deadline for applying for an upgraded pension has been extended until 26th June 2023.
Calculating EPS Pension:
The pension calculation under EPS 95 is contingent on the average basic salary over the last 5 years and the cumulative service duration. The pensionable salary, derived from the average monthly salary withdrawn by the member in the 12 months preceding EPS exit, now sees an enhanced maximum cap of ₹15,000 monthly. The pensionable service period considers the entirety of a member's service, with a bonus of 2 years after completing 20 years of service. The minimum pensionable service period is 6 months.
Diverse Pension Types under EPS:
EPS unfolds various pension categories, catering to widows, children, and orphans. Widows receive pension benefits until their demise or remarriage, with the eldest widow taking precedence in case of multiple widows. Children are eligible for a monthly pension until the age of 25, in addition to the widow pension. Orphan pension supports children in the absence of a surviving widow. A reduced pension can be availed if the member has 10 years of service and is aged between 50 and 58.
Application Process and Forms:
To harness EPS benefits, members navigate through a series of forms:
Form 10C: For withdrawal before completing 10 years of service.
Form 10D: For monthly pension withdrawal after reaching 50 years.
Life Certificate: Certifying the pensioner's continued existence.
Non-Remarriage Certificate: Essential for widows/widowers.
Benefits of EPS 95:
EPS unfolds a spectrum of benefits, including:
A fixed income post-retirement.
Monthly pension for disabled members.
Complete pension withdrawal at 58.
Pension provision for the member's family in case of the member's demise.
EPS 95 emerges as a cornerstone, fostering financial security for employees in their post-retirement phase. Dive into the comprehensive scheme and unlock the multitude of advantages it offers. Secure your retirement with EPS 95, a cornerstone of financial well-being.
Author
Pluto Team
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