{"id":10697,"date":"2024-11-19T09:20:05","date_gmt":"2024-11-19T03:50:05","guid":{"rendered":"https:\/\/gwcindia.in\/blog\/?p=10697"},"modified":"2025-04-03T11:08:39","modified_gmt":"2025-04-03T05:38:39","slug":"what-is-the-employee-pension-scheme","status":"publish","type":"post","link":"https:\/\/www.gwcindia.in\/blog\/what-is-the-employee-pension-scheme\/","title":{"rendered":"What is the Employee Pension Scheme"},"content":{"rendered":"<h1>What is the Employee Pension Scheme (EPS)?<\/h1>\n<p>Your CTC is not your salary. It&#8217;s made up of many different components, one of which is your pension. While a portion of our earnings is consistently diverted to this account, we hardly know how it functions. The Employee Pension Scheme (EPS) occupies a big pie of the savings in most households. That being the case, it is crucial that you understand how to use it.<\/p>\n<h2>What is the EPS?<\/h2>\n<p>The Employee Pension Scheme (EPS) is a social security scheme managed by the Employees&#8217; Provident Fund Organization (EPFO) in India. It&#8217;s designed to provide financial security to employees during their retirement years.<\/p>\n<h2>How does Employee Pension Scheme work?<\/h2>\n<p>EPS is a mandatory scheme for employees covered under the Employees&#8217; Provident Fund (EPF) Act 1952. When an employee contributes to the EPF, a portion of that contribution is also allocated to the EPS.<\/p>\n<h2>What is the Employee Pension Scheme Key Features of EPS:<\/h2>\n<ul>\n<li><strong>Pension upon retirement, disablement, or death:<\/strong> This pension is based on the employee&#8217;s length of service and average salary.<\/li>\n<li><strong>Minimum pension amount:<\/strong> Currently set at 1,000 rupees per month for eligible employees.<\/li>\n<li><strong>Benefits for family members:<\/strong> In case of the employee&#8217;s demise.<\/li>\n<li><strong>Reduced pension for early retirement:<\/strong> For employees who opt for early retirement.<\/li>\n<\/ul>\n<h2>Eligibility Criteria for EPS:<\/h2>\n<ul>\n<li>The person should be a member of the Employees&#8217; Provident Fund Organization (though not continuously).<\/li>\n<li>The person should hold a minimum service period of 10 years.<\/li>\n<li>In case you have failed to avail of the benefits by the age of 58, you will be allowed to avail of the pension at an additional rate of 4% per year.<\/li>\n<\/ul>\n<h2>Calculating EPS Pension:<\/h2>\n<p><strong>Pensionable Salary:<\/strong> The average of the last 12 months&#8217; salary the individual received.<\/p>\n<p><strong>Pensionable Service:<\/strong> The duration during which the employee serves or works. If an employee withdraws the entire corpus before fulfilling the minimum 10-year period, he will have to restart the whole process. If an employee has completed 20 years of service, 2 years will be added to his serviceable period (20+2) as a reward. For pension calculation, the bar is set as 6 months.<\/p>\n<p><strong>Monthly EPS pension receivable calculation:<\/strong><\/p>\n<p>(Annual pensionable salary * Assumed pensionable service year) \/ 70<\/p>\n<p><strong>Example:<\/strong><\/p>\n<p>If your annual pensionable salary is 29,918 and your assumed pensionable service year is 15 years, then your monthly EPS pension receivable would be:<\/p>\n<p>(29,918 * 15) \/ 70 = 6,426 rupees<\/p>\n<h3>Conclusion<\/h3>\n<p>The Employee Pension Scheme is a crucial aspect of employee benefits, providing financial security and peace of mind during retirement. It&#8217;s important to understand how the scheme works and how your pension is calculated to ensure a comfortable retirement.<\/p>\n<h2>Frequently Asked Questions (FAQs): Employee Pension Scheme (EPS<strong>)<\/strong><\/h2>\n<p><strong>What is the Employee Pension Scheme (EPS)?<\/strong><\/p>\n<p>The Employee Pension Scheme (EPS) is a social security initiative managed by the Employees&#8217; Provident Fund Organization (EPFO) in India. It provides financial security to employees post-retirement, as well as benefits in cases of disablement or death.<\/p>\n<p><strong>How is the EPS different from the Employees&#8217; Provident Fund (EPF)?<\/strong><\/p>\n<p>While both EPS and EPF are managed by the EPFO, they serve different purposes:<\/p>\n<ul>\n<li><strong>EPF:<\/strong> Focuses on retirement savings, where both the employer and employee contribute.<\/li>\n<li><strong>EPS:<\/strong> Provides a pension benefit funded by the employer\u2019s EPF contribution.<\/li>\n<\/ul>\n<p><strong>Who is eligible for the Employee Pension Scheme?<\/strong><\/p>\n<p>To qualify for EPS benefits:<\/p>\n<ul>\n<li>You must be a member of the EPFO.<\/li>\n<li>You need at least 10 years of continuous or non-continuous service.<\/li>\n<li>Benefits are available at 58 years, with an option for early pension at 50 years (at a reduced rate).<\/li>\n<\/ul>\n<p><strong>What is the Pensionable Salary under EPS?<\/strong><\/p>\n<p>Pensionable Salary is the average of the last 12 months\u2019 salary before leaving the job or retirement. The maximum salary considered is \u20b915,000 per month.<\/p>\n<p><strong>Can I withdraw my EPS funds before completing 10 years of service?<\/strong><\/p>\n<p>Yes, if you have less than 10 years of service and decide to withdraw, you will receive a lump sum based on your contributions and service period. However, this will forfeit your pension eligibility.<\/p>\n<p><strong>What happens if I don\u2019t claim my EPS pension at 58 years?<\/strong><\/p>\n<p>You can still claim your pension later. For every delayed year (after 58), you will earn an additional 4% on your pension amount.<\/p>\n<p><strong>Are there family benefits under the EPS?<\/strong><\/p>\n<p>Yes, EPS offers financial security to family members:<\/p>\n<ul>\n<li><strong>Spouse Pension:<\/strong> Lifetime pension for the spouse upon the member\u2019s death.<\/li>\n<li><strong>Children Pension:<\/strong> Up to two children receive 25% of the monthly pension until they turn 25.<\/li>\n<\/ul>\n<p><strong>Is it possible to receive a higher pension under EPS?<\/strong><\/p>\n<p>Higher pensions are possible if:<\/p>\n<ul>\n<li>Your employer contributes to EPS based on your actual salary (not capped at \u20b915,000).<\/li>\n<li>You opt for the joint declaration for higher contributions with your employer.<\/li>\n<\/ul>\n<p><strong>Can I transfer my EPS account when I switch jobs?<\/strong><\/p>\n<p>Yes, your EPS account is linked to your Universal Account Number (UAN). Contributions and service years automatically transfer when you switch jobs.<\/p>\n<p><strong>What is the minimum pension amount under EPS?<\/strong><\/p>\n<p>Currently, the minimum pension amount is \u20b91,000 per month for eligible employees.<\/p>\n<p><strong>Can I nominate someone for my EPS benefits?<\/strong><\/p>\n<p>Yes, you can nominate family members (spouse or children). If no family members exist, you can nominate someone else for the benefits.<\/p>\n<p><strong>What are common misconceptions about EPS?<\/strong><\/p>\n<ul>\n<li><strong>Misconception:<\/strong> EPS is part of your salary.\n<ul>\n<li><strong>Fact:<\/strong> EPS is funded by the employer&#8217;s EPF contribution, not the employee\u2019s.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Misconception:<\/strong> The pension amount is substantial for all.\n<ul>\n<li><strong>Fact:<\/strong> The pension depends on service years and capped contributions, so it might be lower than expected.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>How can I check my EPS balance and service years?<\/strong><\/p>\n<p>You can log into the EPFO portal or use the EPFO mobile app to view your EPS balance and service details.<\/p>\n<p><strong>What steps should I take to claim my EPS pension?<\/strong><\/p>\n<ol>\n<li>Submit Form 10D through your employer or online via the EPFO portal.<\/li>\n<li>Ensure your bank account, Aadhaar, and other KYC details are updated.<\/li>\n<\/ol>\n<p><strong>Can I access EPS benefits if I live abroad after retirement?<\/strong><\/p>\n<p>Yes, you can claim EPS benefits if you are eligible, even if you reside outside India. Ensure your KYC details are complete.<\/p>\n<p>At <a href=\"https:\/\/www.gwcindia.in\/\">Goodwill Wealth Management<\/a>, we believe in making trading hassle-free and convenient. We have tailored brokerage plans and value-added services to suit your individual goals and preferences. Our expert team is dedicated to providing you with the support and guidance you need to achieve your financial aspirations.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the Employee Pension Scheme (EPS)? Your CTC is not your salary. It&#8217;s made up of many different components, one of which is your pension. While a portion of our earnings is consistently diverted to this account, we hardly know how it functions. The Employee Pension Scheme (EPS) occupies a big pie of the [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":10698,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[38,2,10],"tags":[697,693,696,694,695],"class_list":["post-10697","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-education","category-top-stories","tag-calculating-eps-pension","tag-employee-pension-scheme","tag-epfo","tag-eps","tag-pension-scheme"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/10697","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/comments?post=10697"}],"version-history":[{"count":4,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/10697\/revisions"}],"predecessor-version":[{"id":12910,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/10697\/revisions\/12910"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/media\/10698"}],"wp:attachment":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/media?parent=10697"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/categories?post=10697"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/tags?post=10697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}