The Employees’ Provident Fund Organisation (EPFO) on Monday allowed the withdrawal of accumulations in Employees’ Pension Scheme (EPS-95) for subscribers who have less than six months of service left. Earlier, the EPFO members with less than six months left in service were allowed to withdraw the accumulations in their Employees’ Provident Fund (EPF) account only.
What is EPS?
Employees’ Pension Scheme 1995 or EPS-95 is a social security scheme which was introduced in November 19, 1995 by the EPFO. The scheme entitles the employees working in the organised sector for a pension after their retirement at the age of 58 years.
Who is eligible for EPS?
All employees who are eligible for the EPF scheme are be eligible for EPS however, the benefits of the EPS can be availed only if the employee has been in service for at least 10 years (this does not have to be continuous service). The scheme’s benefits are available to both existing as well as new EPF members.
Who contributes to EPS?
Both the employee and the employer contribute 12 per cent of the employee’s basic salary and Dearness Allowance (DA) to the EPF. While the entire portion of employee’s contribution goes to EPF, the employer’s contribution goes to EPS at a rate of 8.33 per cent.
What are the benefits under EPS?
Pension on retirement at the age of 58 years
An EPS member becomes eligible for pension once they retire at the age of 58 years. However, it is mandatory for them to be in service for at least 10 years before turning 58 and availing pension benefits. An EPS Scheme Certificate is generated which can be used to fill Form 10D for withdrawing the monthly pension.
Complete withdrawal on leaving service before becoming eligible for monthly pension
If a member is not able to remain in service for 10 years before turning 58 years old, he/she can withdraw the complete sum invested so far after turning 58 years by filling Form 10C. However, he/she will not get monthly pension benefits post retirement.
Pension on total disablement during the service
An EPFO member who becomes disabled permanently is entitled to a monthly pension irrespective of the fact that he/she has not served the pensionable service period. In this case, the employer has to deposit funds in the concerned employee’s EPS account for at least one month to be eligible for the pension.
The member becomes eligible for monthly pension from the date of permanent disablement and is paid for lifetime. However, the member may have to undergo a medical examination to determine whether he/she is unfit for their job before becoming disabled.
Family pension on the death of the member
A member’s family becomes eligible for the pension benefits in the following cases: 1) In case of death of the member while in service and the employer has deposited funds in his EPS account for at least one month 2) In case the member has completed 10 years of service and dies before attaining 58 years of age 3) In case of death of the member after the commencement of the monthly pension.