Employee Pension Scheme EPS
What is Employee Pension Scheme EPS and why this topic is important for you.
If you are a employee, Just Imagine !!
You reached at the age of 60 years, your employer superannuated you and stop your monthly paycheck. How will you live when your income stopped suddenly ?
How your day to day requirements fulfill ?
Is it sound scary future, up curs yes, but in the reality is we have take action from today itself for our old age. It is a phase of life worth living.
Employee Pension Scheme EPS is one of the way out to save money for old age needs and the best part it is completely contributed by your employer. If you are a member of EPF ,then your 8.33% of your basic and dearness allowance will be given your employer as retiral benefits and deposited into EPS Account.
What is the Employee Pension Scheme EPS ?
The Employee Pension Scheme EPS is a defined benefit scheme that came into effect in November 1995. It is a part of Employee Provident Fund Scheme. The members participating in EPS are eligible to receive a pension upon their retirement subject to eligibility of certain conditions.
For EPS members, out of the 12% of employer contribution to the Provident Fund (PF), 8.33% is segregated towards the EPS. Earlier Salary for this purpose is capped at the statutory wage ceiling (currently Rs. 15,000 per month) unless the member has opted for contribution on higher salary by way of a joint declaration signed by both the employer and the employee under para 11(3) / 11(4) of the scheme as applicable.
1)Eligibility of Employee Pension Scheme EPS :
a) Who is eligible to be a member of the EPS ?
Any employee who has acquired Provident Fund (PF) membership, is eligible to become a member of EPS. i.e. individuals who have become part of the workforce and contributed to PF.
b) When does an employee get a pension under the EPS ?
Any employee who is served 10 years of continuous of service in any establishment, earlier in one establishment he or she is eligible for Employee Pension Scheme. In addition to that employee must attain the age of 58 years to receive pension under this scheme.
c) Can an employee defer the age of drawing his pension beyond 58 years?
Yes. A member who has attained the age of 58 years and is eligible for the pension, may choose to defer the age of drawing pension later than 58 years but not beyond 60 years of age.
2) Benefits of Employee Pension Scheme EPS:
- Pension for Widow- Pension given to the widow of employee after death.
- Pension for Disablement- Disabled employee get pension.
- Pension for left employee before eligible-An employee can claim lumpsum amount before service 10 years.
- Pension on retirement- After attaining 58 years of age employee can get monthly pension.
a) What are the Benefits of Employee Pension Scheme ?
Monthly contribution for EPS is deposited by employer in the EPS account which resulted a recurring monthly income after retirement at the time old age of employee.
- Contributed by Employer(8.33% out of 12 % is deposited EPS Account)
- Fixed income in Old age (Pension received after 58 years)
- Safe & Secure (Controlled and monitored by EPFO)
- 50% of pension after death of Employee
3) Procedural aspect of Employee Pension Scheme EPS :
Where is EPS money deposited ?
EPS money contributed by employer is deposited in EPS account number to EPFO. The money is managed by EPFO. When the employee eligible after serving 10 years of service and attaining the age of 58 years ,he/she receive pension.
How to transfer EPS money from one account to another account ?
When a employee switches job from one employer to another at that time it is necessary for employee to transfer pension amount from previous Pension account number to the new pension account number created by new employer.
To transfer pension money UAN portal home page to be logged in by entering ten digit UAN number and Password and captcha.
Then click on one account one EPF transfer and open Transfer request application form and fill the desired information like previous EPF account number and previous employer details.
After entering correct information you have to verify by entering registered mobile number to receive OTP(One time Password). Generally six digit OTP sent to the mobile number which to be used to verify and then submit the application form.
While applying EPF transfer you have to ensure your Pension account number to be reflected in the application form.
Make sure Date of exit in EPF and EPS is mentioned .
How to claim EPS money ?
To claim EPS money withdrawal ,Form 10(c) is applied. Now this application is applied through online mode. Application facility is available in UAN portal.
Bank account details and documentary proof like Cancel cheque or Passbook photo shall be uploaded while applying withdrawal claim.
4) Calculation of Employee Pension Scheme EPS :
How to calculate Pension amount ?
To calculate Pension amount a specific formula is there. Pension amount is equal to Pensionable Salary multiplies with service that is worked and the whole amount divided by 70.Pensionable salary is nothing but the average salary of last sixty months before retirement.
What is EPS calculation Formula ?
Monthly Pension Amount= Pensionable Salary* Pensionable Service/ 70
EPS calculation with Example
Let’s say your pensionable salary is Rs. 15,000
Service you worked 30 years
Monthly pension amount= 15,000*30/70=6,428.57
What is Pensionable salary ?
The pensionable salary is the average salary on which pension contribution were calculated in the last 60 months before the date of retirement or superannuation or death of employee.
Earlier pensionable salary capped at Rs. 15,000 per month however after the verdict of honorable Supreme court about higher pension scheme, those who are eligible and made contribution on higher basic salary, their pensionable salary is calculated as per higher salary.
What is Pensionable Service
Pensionable service is the number of years of service the employee has render at the time retirement or superannuation.
5) Grievance of Employee Pension Scheme EPS :
How to register grievance of EPS ?
- Go to website of EPFiGMS
- Click on “register Grievance” from task bar.
- Click on PF member from Status menu.
- Click on Pension for raising grievances related to Pension.
Conclusion:
In the above article , I covered the fundamental of Employee Pension Scheme EPS and I hope it help to understand and take action.
Feedback:
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Important article help you to understand more about Employee Provident Fund and Employee Pension Scheme EPS.
How to calculate EPF from Salary.
