Employee pension scheme (EPS): Employee pension scheme (EPS) is a social security scheme. It is run by the Employees Provident Fund Organization (EPFO). Employees working in the organized sector get pension after retiring at the age of 58 under the scheme. However, the benefit of this scheme can be availed only when the employee has worked for at least 10 years. It is not necessary to work continuously.
The EPS was launched by the EPFO in the year 1995, in which the then and new EPF members were allowed to join, but the scheme was later changed. According to the new rule, if an employee joined the Employees Provident Fund (EPF) scheme after September 1, 2014 and his salary is more than Rs 15000, then he cannot open EPS account.
Through a notification issued by the government on 22 August 2014, the amendment in the rules related to EPF and EPS schemes was announced. According to the rules effective from 1 September 2014, two changes were made to the scheme.
This is how the rule has been changed
The monthly salary limit for joining the Provident Fund (PF) scheme has been increased from Rs 6,500 per month to Rs 15,000 per month. Second, those people whose monthly salary was more than Rs 15,000 at the time of joining the scheme were stopped from joining the pension scheme. Basic salary and dearness allowance (DA) are added to the salary for the purpose of EPS scheme. Therefore, as per the revised rules, if the basic salary and DA of a person is more than Rs 15,000 per month together, then he will not be eligible to join the EPS scheme.
How to connect to EPS?
You must be a member of EPFO.
10 years job should be compulsory.
58 years of age is required.
You can withdraw your EPS at a reduced rate when you are 50 years old.
You can postpone your pension for two years, till the age of 60 years, after which you will get a pension at an additional rate of 4 percent every year.
What are the benefits of EPS?
The member of the scheme becomes eligible for pension benefits after retiring at the age of 58 years.
If a member has not been in service for 10 years before the age of 58, he can withdraw the entire amount by filling Form 10C at the age of 58, but will not get the monthly pension after retirement.
Any member of the EPFO who unfortunately becomes completely and permanently disabled will get a monthly pension, even if he has not done the required 10 years job.
How to do multiplication?
How much you will get monthly pension under EPS scheme after retirement depends on how much your pensionable salary is and
For how many years have you rendered pensionable service. Calculation of monthly pension amount of any PF account holder member is done on the basis of pension = salary X years / 70 years of job.
The pensionable salary of any PF account holder is the average of his monthly salary for the last 12 months. At the same time, the actual service period of EPFO member is considered as pensionable service. At the time of calculating pensionable service period, the duration of job done in various employers and companies is added.
