+91 9828123489
+91 9828123489
help@vakilkaro.co.in.jpg)
In India, numerous pension schemes aim to secure the financial future of employees during their retirement years. The Employee Provident Fund Organisation (EPFO) plays a pivotal role in managing these schemes, ensuring that employees receive their pensions upon reaching the age of 58. Both employees and employers contribute to building the pension corpus for future benefits. Read on to explore the details of the EPS 95 pension scheme.
What is EPS 95 Pension Scheme?
EPS 95, or Employee Pension Scheme 1995, is a social security initiative introduced by the Employees’ Provident Fund Organisation on November 19th, 1995. This scheme is designed to provide pension benefits to employees working in the organized sector upon their retirement. EPFO administers the scheme and guarantees pension payments to employees once they reach the age of 58.
This scheme extends its benefits to both existing and new EPF members. Both parties, i.e., the employee and employer, contribute 12% of the employee’s salary, which includes the basic salary and dearness allowance (DA), to the EPF. The employee's entire contribution is credited to the EPF each month. Conversely, 8.33% of the employer’s contribution is allocated to the Employees’ Pension Scheme, while the remaining 3.67% is directed to the Employees’ Provident Fund.
EPS 95 Minimum Pension
The Government of India has set a minimum range of pensions that employees are entitled to receive, regardless of their contribution to the Employee Pension Scheme. This government-mandated fixed minimum pension ranges from Rs. 1,000 to Rs. 2,000 per month for pensioners. This provision was introduced by the government on September 1st, 2014, along with additional budgetary support for the EPF scheme.
In addition to the contributions made by employees and employers, the government offers budgetary support of 1.16% of each employee's wages to the Employees’ Provident Fund Scheme, up to a maximum of Rs. 15,000 per month.
EPS 95 Pension Latest News
As of May 3rd, 2023, the Ministry of Labour & Employment announced that employees opting for a higher EPS pension will no longer need to contribute separately. The additional 1.16% of the salary they would have contributed beyond the wage ceiling will now be drawn from the 12% of the employer's contribution. This decision aligns with a directive from the Supreme Court to establish an alternative methodology.
Furthermore, the deadline for applying for a higher pension has been extended to June 26th, 2023. As per the current pension calculation method under EPS 95, your pension amount depends on your total years of service and average basic salary in the last five years. Consequently, the longer your service period, the greater your pension benefits.
EPS 95 Pension Eligibility
To avail the benefits of EPS 95, you must meet the following eligibility criteria:
- You must be a member of the EPFO.
- You must have completed a minimum of 10 years of service.
- The regular retirement age for a pension is 58 years. If you retire earlier, you can receive a pension at a reduced rate.
- If you opt to receive your pension from the age of 60, you will receive an additional 4% annually.
- If you have not completed 10 years of service but have served for more than 6 months and are unemployed for more than 2 months, you are eligible to withdraw your EPS amount.
- If an employee becomes totally and permanently disabled, they are eligible for a monthly pension, even if they have not completed the pensionable service period. However, they must undergo a medical examination to confirm their inability to perform their job due to their disability.
- In the event of an employee's death while in service, their family members may be eligible for pension benefits.
EPS 95 Pension Rules
Here are some key rules related to the Employee Pension Scheme 95:
- Employees earning Rs. 15,000 or less per month must mandatorily enroll in this scheme.
- Employers are required to contribute within 15 days of each month's end.
- If a widow or widower of a deceased employee remarries, the children will receive the pension.
- Employee contributions include components of basic salary, dearness allowance, admissible cash value of food concessions, and retaining allowance.
- To transfer EPS online, you can use a composite claim form.
- Family members of EPFO members can avail of EPS benefits by submitting various forms, including Form 10C for withdrawal before completing 10 years of service and Form 10D for monthly pension withdrawal after the age of 50. A Non-Remarriage certificate and a life certificate may also be required for specific cases.
- To check the accumulated amount in the EPS account, you can review the EPF passbook, downloadable from the EPF passbook portal. The last column of the passbook displays the monthly contributions to the account.
- When changing jobs, you may need to fill out Form 11 and Form 13 for PF balance transfer. However, if you have an existing Universal Account Number (UAN) and have used Aadhaar as your KYC in the EPF database, submitting Form 11 may suffice. Form 13 facilitates the transfer of your PF balance from your previous employer to the new one.
How is EPS 95 Pension Calculated?
The monthly pension an employee receives depends on their pensionable service and pensionable salary. Here is the formula to calculate a member employee’s monthly pension income:
Member’s Monthly Pension = (Pensionable salary x Pensionable Service) / 70
Pensionable Salary:
This is the average monthly salary received by an employee in the last 60 months before exiting the Employees’ Pension Scheme, based on a Supreme Court judgment on November 4th, 2022. Previously, it was the average monthly salary during the last 12 months of the employee’s participation in the scheme.
Pensionable Service:
This refers to the total number of years for which contributions were made to the EPS account. According to the law, pensionable service is rounded off to the nearest year. If you serve for 6 months or more, it is considered as a full year, but less than 6 months does not count. If you superannuate at the age of 58 and have served for more than 20 years, your service tenure will be extended by 2 years.
Benefits of EPS 95 Pension
Employees eligible for EPS pension can access various benefits:
- Pension from the Age of 58: EPS members qualify for a pension starting from the age of 58 upon retirement. To become eligible, they must contribute for a mandatory 10-year period before turning 58. After retirement, they receive an EPS pension scheme certificate, which is essential for filling out Form 10D to access monthly pension benefits.
- Pension in Case of Disability: If an EPS member becomes completely and permanently disabled, they are entitled to a monthly pension, regardless of whether they have fulfilled the pensionable service period. The pension starts from the date of permanent disability and continues for life. To be eligible, the employer must have deposited funds in the member's EPS account for at least one month. However, the disabled employee must undergo a medical examination to confirm their
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.jpg)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
-registered-ngo-making-a-difference-(3).jpg)
.jpg)
-1-registration-for-ngo.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
-your-roadmap-to-company-formation-(4).jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg){kind=logo}
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
-safeguarding-your-secrets.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
-explained-(2).jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)
-and-itr-filing.jpg)
-and-itr-filing.jpg)
.jpg)
.jpg)
-staying-compliant.jpg)
+91 9828123489
help@vakilkaro.co.in