Overview:
EPF Pension which is technically known as Employees’ Pension Scheme (EPS), is a social security scheme provided by the Employees’ Provident Fund Organization (EPFO). The scheme makes provisions for employees working in the organized sector for a pension after their retirement at the age of 58 years. However, the benefits of the monthly pension scheme can be availed only if the employee has provided a service for at least 10 years (this does not have to be continuous service). EPS was launched in 1995 and allowed existing and new EPF members to join the scheme. It gives the financial security to every retired employee covered under the scheme or its family members on his death.
Applicability of monthly pension under EPS:
- Employee should be a member of EPFO.
- Employee should have completed 10 years of service
- Employee has reached the age of 58
- Employee can also withdraw his EPS at a reduced rate from the age of 50 years
- Employee can also defer his pension for two years (up to 60 years of age) after which he will get a pension at an additional rate of 4% for each year
Breakup of EPS Contribution
The contribution towards EPS is made by employer and government. An employer should contribute 12% of under Section 6 of the Employees Provident Fund Act, out of which 8.33% represent the contribution towards EPS and government is contributing 1.16% subject to a marginal limit of 180/month/employee.
