4,80,000 people visited this section in last 30 days. Apply Online

Get Cashback of Upto ₹ 1,000* on Loans Apply Online

MyLoanCare Customer Ratings - 4.5/5.0 Apply Online

EPS

Employee Pension Scheme

Last Updated 16th Jun 2021

  • The Employees Pension Scheme of 1995 generates pension to the employees from the organized category after the age of 58.
  • Employees with a minimum of 10 service years are eligible for the scheme.
  • From 12% of employer's contribution to EPF, 8.33% goes to Employee Pension Scheme.
  • The pension is calculated based on the pensionable salary and pensionable service.
  • The scheme provides widow pension, child pension and orphan pension as well.
  • News: Get PPO Number in 5 easy steps New
Yes Bank
Returns bhi, Rewards bhi
5.5%* interest p.a + up to 1500** YES Rewardz Points on account opening
Earn up to 50k** YES Rewardz Points in 1st year
Exclusive offers on Demat & Lockers
>OPEN YOUR ACCOUNT DIGITALLY NOW
Disclaimer: For balance above INR 10 lcs to INR 1Cr. For YES FIRST customers. Terms and conditions apply. For more details please visit: www.yesrewardz.com
Looking for an Investment?

What is Employees Pension Scheme?

Operated by the Employees’ Provident Fund Organization or EPFO, the Employees Pension scheme aims to provide pension to the employees of the organized category. Employees who have continuous contributory membership of EPF for 10 years can be beneficiaries under this scheme. The scheme starts generating the monthly pensions once the beneficiary reaches the retirement age of 58.

The Employees Pension Scheme or the EPF pension scheme was launched in the year 1995. The beneficiaries of the Miscellaneous Provision Act of 1952 and the Employees Provident Fund automatically fall under the eligibility list of the EPS scheme. Unlike the contribution in EPF, the pension contribution in EPF is not shared by the employees and employers. Only 8.33% from the employers’ share of 12% goes to EPS pension. 

Eligibility Criteria for Employees Pension Scheme

The following individuals are considered eligible to receive a pension under the Employees Pension scheme 1995.

  • Should be a member of the Employees’ Provident Fund Organization.
  • Should have been in the service for 10 years, not necessarily continuously. 
  • Should be 50-58 years old.

Furthermore, as stated earlier, all under the Miscellaneous Provision Fund along with the beneficiaries of the Employee Provident Fund are eligible for the EPF pension scheme. 

Calculate Your Pension Under EPS

The monthly pension amount under the Employees Pension Scheme is decided based on the pensionable salary and the pensionable service period of the member employee. The amount can be computed using the below-mentioned formula.

Pensionable salary (annual) * Pensionable Service (in years) / 70 = monthly EPS pension 

Before further illustrating the formula and calculating the pension, here are brief discussions for pensionable salary and pensionable service.

Pensionable salary

The average monthly salary of the employee in the recent 12 months of service is the pensionable salary. Any non-contributory day in the time span of the latest 12 months will not be considered, and the benefit will be given to the employee. 

Suppose the monthly salary of one employee is ₹ 20,000. The contribution to the EPF pension scheme is 8.33%. In this scenario, the pensionable salary will be:

₹ 20,000 (monthly salary) * 8.33 (EPF pension contribution) / 100 = 1,666 (monthly pensionable salary) 

Annual pensionable salary= 1666*12 (19,992)

In case an employee does not start working on the 1st of a month, his salary for the month will be given for his or her working days and not for 30 days. Suppose, one starts working on the 5th of a month, the salary will be calculated for 25 days based on the payment of each day. However, the monthly salary for EPS calculation will be the salary of the complete month, i.e., of 30 days.  

Pensionable service

Pensionable service is the period an employee has served. In case an employee withdraws the EPS before completing the minimum service period, i.e., 10 years and starts working for some other company, the contribution for the EPS scheme will have to be reset. 

While calculating the pensionable salary, one must keep the following points in mind.

  • The pensionable service span is counted on a 6-month basis as it is the minimum period of pensionable service.
  • In case the service period is 5 years and 3 months, the span of pensionable service will be counted as 5 years. However, if the span crosses 6 months, it will be considered a year, which means a span of 5 years and six months or more will be counted as 6 years.
  • Employees are rewarded an additional 2 years of pensionable service for completing 20 years in service. 

Now, let’s calculate the monthly pension using the previous formula.

19,992 (annual pensionable salary as calculated in the ‘Pensionable Salary section) * 18 (years of pensionable service) / 70 = 5,141 (monthly EPS pension) 

Benefits of EPF pension

Below are the benefits of the Employees Pension scheme 1995.

  • Financial assistance after retirement: The monthly pension generated under the EPS scheme acts as a source of regular income after retirement. Thus it provides financial support to the retired individuals, provided the minimum pensionable service span has been served.
  • Pre-mature withdrawal: The eligible age for receiving the EPF pension scheme is 58 years; however, there is some concession on the age limit for pre-mature withdrawal. Employees can opt for pre-mature withdrawal at the age of 50; however, at a lower rate and there will be no pension benefits after retirement.
  • Pension for disable: Pension is generated irrespective of the completion of the pensionable service span, in case of partial or complete disablement. The pension generation starts from the day of disablement and continuous for a lifetime. A medical check-up might be arranged before generating the pension.
  • Transferable: At the demise of the employee, the pension benefit is transferred to a family member.

Types of Pensions under Employees’ Pension Scheme

The different types of pensions under the Employees’ Pension scheme have been elaborated below.

  • Widow pension: After the demise of the employee, the spouse of the employee becomes eligible for widow pension under the EPF pension scheme. The widow will receive pensions until remarriage or death. The pension amount for widows is decided based on the pension amount of the member employee. The minimum amount under the widow pension is ₹ 1,000.
  • Child pension: The Employee Pension scheme generates the child pension to the surviving child of the deceased employee. The maximum amount that can be generated as a child pension is 25% of the widow pension. The child will receive the pension until he or she reaches the age of 25. Point to remember is that the child pension is generated along with the widow pension.
  • Orphan pension: If the employee is deceased and there is no surviving widow, the surviving children will become eligible for the orphan pension. The orphan pension will be a maximum of 75% of the widow pension.
  • Reduced pension: If a member employee decides to withdraw the pension before reaching the age of 58, he or she will receive the pension at a reduced rate of 4% per year. This is termed as the reduced pension. However, the employee must be 50 years old to be eligible for a reduced pension, and once the employee reaches the age of 58, the pension will start generating at the standard rate. 

How to Check Your EPS Amount?

You can follow these few steps for viewing the EPS amount on the EPF pensioners portal.

  • Visit the EPF pensioners portal, https://passbook.epfindia.gov.in/MemberPassBook/Login.
  • Go the the ‘Services’ tab and click on ‘For Employees’.
  • Tap on ‘Member Passbook’ and lead to the next screen.
  • Log in using the UAN or Universal Account Number and password.
  • Once logged in, tap on your respective Member Id from the given options.
  • The details will appear. Check the EPS amount in the ‘Pension Contribution’ column.

One can check the EPS amount in their EPS account passbook as well. The last column of the passbook displays the monthly EPS contribution made by the employer. You can download the passbook from the EPF pensioners portal.

Latest news about EPF

  • Avail PPO Number in few seconds.
    As per the latest update from The Employee Provident Fund organisation, Pensioners can now get PPO Number using their bank account number or PF Account Number in few seconds. Here is what you need to do:
  • Visit EPFO Website at www.epfindia.gov.in
  • Click on ‘Pensioners Portal’ on the left side of the homepage and then on Know your PPO No.
  • Enter your linked bank account number or your member identification number. You can now view the PPO Number.
  • .

FAQs

How much pension will I get from EPF after retirement?

The pension amount that you get from EPF after retirement depends on your pensionable salary and pensionable service. Multiply your annual pensionable salary with the number of years of your pensionable service. Divide the sum by 70, and you will get your EPF pension.

Who is the eligibility for pension under the EPF Act?

Under the EPF act following are eligible for the pension.

  • Member of Employees’ Provident Fund Organization.
  • Having a service period of minimum 10 years.
  • Having reached the age of 58. 

How do I calculate my employee pension?

You can use a simple formula to calculate your employee pension by multiplying your pensionable salary with your pensionable service and then by dividing the amount by 70. 

How much pension will I get from EPS?

The pension you get from EPS depends on the pensionable salary and pensionable service. The said two amounts are multiplied and then divided by 70 to get the amount. However, this applies only if you have reached the age of 58. If you make any withdrawal before the age of 58, the pension amount will be reduced. 

Which is better NPS or EPS?

NPS and EPS are similar in nature. However, in terms of investment, NPS more flexible than EPS. The interest rate provided under NPS is somewhat higher than EPS. Nonetheless, both come with tax benefits. You can opt for any of these two based on your preference. 

How to do EPS transfer online?

To transfer EPS online, you have to log in on the EPF employee portal. Once logged in, you can request the transfer on the job change via the composite claim form. The account will automatically be transferred to your new account.

What is a pension contribution in EPF passbook?

The pension contribution is the share provided by the employer in the EPS. Generally, the employer contribution made by the employer is 8.33% of the employees’ standard salary. 


Notification ×
  • Home Loan

    Home Loan at all-time low rates starting at 6.65%. Cashback of up to ₹ 1,000.

    Apply Now
  • Personal Loan

    Instant Personal Loan starting at 10.25% with Cashback of up to ₹ 1,000 .

    Check Offers
  • Gold Loan

    Instant Gold Loan starting at 9.50% with Cashback of up to ₹ 500

    Apply Now
  • Loan Against Property

    Best Loan Against Property Offers starting @ 7.20%. Cashback of up to ₹ 1,000*.

    Apply Now
  • Business Loan

    Collateral Free Business Loan Rates starting at 14.00% with Overdraft facility.

    Apply Now
  • Fixed Deposit

    AAA rated FDs with returns as high as 6.95%.

    Invest Now
*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
Loader
Please wait while your information is being processed...