All You Wanted to Know - Employees' Pension Scheme
1.Though a majority of organized workers are covered under the Employees' Pension Scheme (EPS) 1995, it is just an add-on to the Employee Provident Fund (EPF) scheme and all EPF members also automatically become EPS members.
2. All EPF members are eligible for pension after 10 years of contribution to EPS.
3. Minimum pension under EPS scheme now is only Rs.1,000 per month.
4. Pension is fixed based on the formula : (Average salary for the last 5 years x No. of years completed in service)/70.
5. The employer contributes 8.33% of salary ( i .e. basic + Dearness Allowance) towards EPS, the definition of salary here is restricted to Rs.15,000 for employees whose salary (i.e. basic + DA) is above this limit. So for them, the EPS contribution will be restricted to Rs.1,250 per month.
6. If your salary (basic + DA) is above Rs.15,000 the pension will be computed only on Rs.15,000. So the maximum pension assuming 35 year service is Rs.7,500.
7. This small pension from EPS is not inflation linked like pension for government employees. Since the cost of living increases due to inflation, this “small pension“ now will become “smaller“ in later years.
8. As of now, EPS is working on the base of new contribution -i.e. contribution from new employees is used to pay the pension for retired ones. Though this may be sustainable for some time because of the demographic dividend in India (i.e. large number of youngsters getting into work force compared to few retired ones), this will not be sustainable in long term.
(Source: Economic Times) more
2. All EPF members are eligible for pension after 10 years of contribution to EPS.
3. Minimum pension under EPS scheme now is only Rs.1,000 per month.
4. Pension is fixed based on the formula : (Average salary for the last 5 years x No. of years completed in service)/70.
5. The employer contributes 8.33% of salary ( i .e. basic + Dearness Allowance) towards EPS, the definition of salary here is restricted to Rs.15,000 for employees whose salary (i.e. basic + DA) is above this limit. So for them, the EPS contribution will be restricted to Rs.1,250 per month.
6. If your salary (basic + DA) is above Rs.15,000 the pension will be computed only on Rs.15,000. So the maximum pension assuming 35 year service is Rs.7,500.
7. This small pension from EPS is not inflation linked like pension for government employees. Since the cost of living increases due to inflation, this “small pension“ now will become “smaller“ in later years.
8. As of now, EPS is working on the base of new contribution -i.e. contribution from new employees is used to pay the pension for retired ones. Though this may be sustainable for some time because of the demographic dividend in India (i.e. large number of youngsters getting into work force compared to few retired ones), this will not be sustainable in long term.
(Source: Economic Times) more
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My self too retired in 2009 for the purpose of EPS Pension having my EPFO membership wef 1July 1979 sanctioned Rs 1646 wef 28 th June 2009 ( however I accepted this after Superannuation on attaining 60 years )which recently revised to Rs 1831 giving 2 years service waightage of Rs 185 Now the salary cap is increased to Rs 15000/- wef Sept 2014 which earlier was Rs 6500/- What is latest pension under EPS 1995 is being granted persons retired @58 also who opted after attainIng 60 years ? more
Aug 31
People retired in 2012 with 39 years of service and average salary pegging at Rs 6500 per month could get family pension as Rs 1741/- pm with no linkage to inflation more
Aug 27
