SALIENT FEATURES OF EPS’95

Know more about the Employee Pension Scheme’95! This scheme has various beneficial provisions for members during their lifetime and after, in terms of pension benefits.

In 1995, the Employees’ Provident Fund Organisation (EPFO) started the Employee Pension Scheme (EPS) as a social security scheme. The EPS is highly beneficial for employees working in the organized sector since it provides them with a secure post-retirement pension.

So, where does this pension come from? The EPS is tied to the Employees’ Provident Fund (EPF). Each month, the employer and the employee individually contribute 12% of the employee’s salary towards the EPF. The employee’s entire share goes towards the EPF. On the other hand, 8.33% of the employer’s share goes towards the Employees’ Pension Scheme (EPS), and the remaining 3.67% goes towards the EPF.Let us now explore the features and benefits of the EPS.

SALIENT FEATURES OF EPS’95

• Member Pension upon superannuation at the age of 58years.
• Early Member Pension from age of 50 years (Only ifunemployed)
• Disablement Pension on permanent and total disablementof member during service.
• Widow/Widower Pension on death of Member [includingunder 1st Proviso to Para 12 (8)] or Pensioner.
• Children Pension for 2 children at a time till the age of 25years on death of the member/pensioner.
• Orphan Pension to 2 orphans at a time till the age of 25years on death of a member/pensioner when there isno spouse or on death of spouse.
• Disabled Children/Orphan Pension for the entire life of thedisabled child/orphan.
• Nominee Pension on death of member and paid for life toa person duly nominated by the member in case there isno family as defined under EPS, 1995.
• Pension to dependent father/mother upon death of amember provided there is no family or nominee of themember.

Benefits of the EPS

1. Guaranteed returns: EPS is a government-run initiative. So, there are no risks to investing in the scheme, and you will receive guaranteed returns. The minimum monthly pension amount that you will receive is Rs. 1,000. As per reports, the government plans to increase this to Rs. 2,000. When you want to start receiving your pension, you have to fill out Form 10D and receive an EPS Certificate. 

2. Your family will receive your EPS after your death: In case of your death, your spouse will continue to receive the EPS amount until their death. After that, your children will receive the pension amount until they reach the age of 25 years. If the children are physically challenged, they will receive the pension amount until their death.

3. You will receive your EPS pension on total disablement during your service: If unfortunately, you become disabled totally and permanently during your service, you are entitled to a monthly pension. This benefit is applicable even if you have not yet completed your pensionable service period. Your employer has to deposit their share of funds in your EPS account for at least one month to be eligible for the pension. Then, this pension is payable for your lifetime.