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Employee Pension Scheme ( EPS ) – Eligibility, Benefits and Calculation

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Yesha Dalwadi

EPS
EPS Benefits
Income Tax
Tax Benefits

Employee Pension Scheme, better known as EPS was launched in 1995 by the Employees Provident Fund Organisation ( EPFO ). It is a scheme for salaried employees to make them self reliant at the time of retirement by providing a regular source of income. The benefit of this scheme can be availed only after completing 10 years of service and after the age of 58. As a part of your EPF account, the employer is supposed to contribute 12% of your salary. This 12% is further divided into 8.33% for EPS and 3.67% for EPF. This article will take you through all the important aspects associated with EPS 95.

It is important to note that as of September 1, 2014, monthly EPS is calculated on the employee’s actual salary if less than INR 15,000 and on INR 15,000 if salary exceeds this limit. Therefore, the maximum EPS contribution can be INR 1,250 per month.   

What is the Eligibility Criteria to Avail EPS Benefits?

One must fall under the following criteria to be eligible to avail the benefits of their Employee Pension Scheme:

Availing pension can also be extended for 2 years i.e. till the age of 60. If this extension is done then the pension is available at an additional 4% every year. Moreover, if you have worked for less than 10 years but are unemployed for more than two months then you can withdraw from your Employee Pension Scheme.

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How is the Pension under the Employee Pension Scheme Calculated?

The pension amount is calculated on the basis of the pensionable salary and pensionable service.

Monthly Salary = Pensionable Salary X Pensionable Service/70

Pensionable Salary

Pensionable salary is the average monthly salary of the employee in the last 12 months of service.

Let us assume that Purva’s monthly salary is INR 15,000 and the EPS contribution is 8.33%. Therefore, in this case, the pensionable salary will be INR 1249.5 ~ to INR 1250 [(15,000*8.33)/100 = 1249.5] and her annual pensionable salary will be INR 15,000 (1250*12)

Pensionable Service

Pensionable Service is the actual service period that the employee has served. It is important to note that if an employee withdraws the EPS before completing the minimum service period, i.e., 10 years and switches to a new company, the contribution for the EPS scheme will have to be reset. The employee also needs to get the EPS Scheme Certificate every time he switches a job. It is important to keep in mind:

If the service period is 9 years and 4 months, then the pensionable service period considered is 9 years. However, if the service period is 9 years and 7 months, the pensionable service period is taken as 10 years.

Now, in the case of Purva let us assume her service period is 9 years and 7 months so, her monthly pension will be:

INR 15,000 (annual pensionable salary as calculated in the Pensionable Salary section)  * 10 (years of Pensionable Service)/70= INR 2,142.85

What are the Types of Pensions Available under the Employee Pension Scheme?

There are mainly four different types of pensions available under the Employee Pension Scheme:

How can I check my Employee Pension Scheme amount?

Follow the below-mentioned steps to check your EPS amount at any given point:

  1. Visit Employees Provident Fund Organisation Portal

    Go to Employees Provident Fund Organisation Portal

  2. Click on ‘Services’

    Now click on ‘Services’ Employee Pension Scheme - Select Services from Homepage Dashboard

  3. Select ‘For Employees’

    Click on ‘For Employees’Employee Pension Scheme - Select 'For Employees'

  4. Go to Member Passbook

    Under ‘Services’ click on Member PassbookEmployee Pension Scheme - Select Member Passbook to view your EPS balance

  5. Add your UAN and Passoword

    Enter your UAN and Password

  6. Select ‘Member ID’ and see you EPS Amount

    Click on the concerned Member ID and you can now see your EPS amount in your Pension Contribution columnView your Employee Pension Balance from the Passbook

You can also check your EPS amount in your EPS account passbook as well. You can download the passbook from the EPF pensioners portal.

FAQs

Both my parents are no more, can I still claim pension?

Yes, you are eligible for claiming orphan pension at 75% of the pension that would have been paid to your parent/parents.

Where can I find my EPS account number?

Your Member ID of the EPF account is the same for EPS account. Your EPF, as well as, EPS contributions are deposited under the same Member ID.

How can I transfer my EPS amount online?

In order to transfer EPS online, you have to log in to the EPF employee portal. Once logged in, you can request the transfer on the job change via the composite claim form. The amount will automatically be transferred to your new account.

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