Employees Pension Scheme (EPS-95) is an important social security scheme launched by the Government of India. This scheme is designed to provide financial security to employees after retirement. Under EPS-95, both the employee and the employer contribute a fixed amount, which is later received by the employee as pension.
In this article we will learn about the EPS-95 scheme in detail. We will understand when and how pension money can be withdrawn under this scheme, what is the eligibility of the scheme, and will also get information about other important aspects related to it.
What is EPS-95?
EPS-95 or Employees’ Pension Scheme 1995 is a government pension scheme operated by the Employees’ Provident Fund Organization (EPFO). This scheme was implemented on 16 November 1995. Its main objective is to provide economic security to organized sector employees after retirement.
Key Features of EPS-95
| Speciality | Description |
| effective date | 16 November 1995 |
| management | Employees Provident Fund Organization (EPFO) |
| target groups | organized sector employees |
| minimum service period | 10 years for pension |
| retirement age | 58 years |
| employee contribution | Nothing (goes to EPF) |
| employer’s contribution | 8.33% of salary (up to maximum of ₹15,000) |
| pension calculation | formula based |
How does EPS-95 contribute?
It is important to understand how contributions are made in EPS-95:
- Employee Contribution: The employee deposits 12% of his salary into the EPF account. None of this goes into EPS.
- Employer’s contribution: The employer also contributes 12% of the employee’s salary. Out of it:
- 8.33% goes into EPS account (on maximum salary of ₹15,000)
- The remaining amount goes to the EPF account
When can one withdraw pension from EPS-95?
There are certain conditions for withdrawing pension from EPS-95:
- Normal Pension (at age 58):
- Must have completed at least 10 years of service
- Must have completed 58 years of age
- Premature Pension (between 50-58 years of age):
- Must have completed 10 years of service
- Pension amount will be reduced
- disability pension:
- can be taken at any time
- Must have permanent total disability
- Family Pension:
- The family receives after the death of the member
Process to withdraw pension from EPS-95
Follow the following steps to withdraw pension:
- Visit EPFO website
- Download and fill Form 10D
- Submit required documents like Aadhar Card, copy of bank passbook etc.
- Submit the filled form and documents to EPFO office
- Pension will start after verification by EPFO
How is EPS-95 pension calculated?
Pension is calculated based on a certain formula:
Monthly Pension = (Pensionable Salary x Pensionable Service) / 70
- Pensionable Salary: Average salary of last 60 months (maximum ₹15,000)
- Pensionable Service: Total years of service (maximum 35 years)
Benefits of EPS-95
- Secure future: Regular income after retirement
- Tax Benefits: No tax on pension
- Family Security: Pension to the family on the death of a member
- Disability Cover: Pension on permanent disability
- Premature Withdrawal: Withdrawal option after 50 years of age
Important things related to EPS-95
- UAN Linking: Link your UAN (Universal Account Number) with Aadhaar
- KYC Update: Update your KYC information from time to time
- Online Facilities: Avail online services on EPFO website
- Pension Transfer: Get your pension account transferred when you change jobs.
- Life Certificate: Submit life certificate every year
Recent changes in EPS-95
- Minimum Pension: A minimum pension of ₹1,000 per month is assured
- High Court’s decision: Allowing pension on higher salary in some cases
- Digitization: Increase in online services
- Relaxation in pension withdrawal: Members with less than 6 months of service are also allowed to withdraw their pension.
Frequently Asked Questions (FAQs) about EPS-95
- Can I connect to EPS-95?
- Yes, if you are a member of EPF you are automatically linked to EPS-95.
- Can I increase my pension amount?
- Yes, the pension amount can be increased by making more contributions or by longer service period.
- Can I take pension before 58 years?
- Yes, premature pension can be taken after the age of 50, but the amount will be less.
- Will my family get pension?
- Yes, your family will get pension after your death.
- Can I withdraw the entire pension amount at once?
- No, pension is received in the form of monthly payment only.
conclusion
EPS-95 is an important social security scheme that provides economic security after retirement to millions of employees. This scheme not only benefits the employees but also provides security to their families. Although there are some challenges in it, the government is continuously working towards improving it.
It is important that all eligible employees take advantage of this scheme and secure their future. Updating your information regularly and using online services of EPFO will help in making the most of EPS-95.
Disclaimer:This article is for general information. Please visit the official website of EPFO or consult a financial advisor before taking any financial decisions. Terms and provisions may change from time to time.
