If you are a member of the Employees’ Provident Fund Organisation (EPFO) and are contributing regularly to the retirement fund then you could become eligible to get pension under the Employees’ Pension Scheme. EPFO members contribute 12% of their basic salary to Employees’ Provident Fund (EPF) and a similar amount is also contributed by their employers. Out of the employer’s contribution, 8.33% goes to EPS subject to a cap of Rs 1,250 per month and the rest is deposited in EPF.
Eligibility rules for EPS pension
An EPF member becomes eligible for getting pension under EPS after completion of 10 years of contribution to the pension fund and after attaining the superannuation age of 58 years. If you stop working between 50 and 57 years, but you have completed 10 years of contribution to the EPS, then also you will be eligible to get a pension under EPS. But the amount of pension will be less.
At the age of 58 if you have not completed 10 years of contribution, then you will be given an option to either withdraw the entire amount accumulated in the pension fund or get a pension. However, you need to work for a minimum period of 6 months to become eligible to withdraw the amount accumulated in the EPS account.
After death of the EPF subscriber, his/her spouse gets pension till he/she is alive.
How EPS pension is calculated
For those who have joined their jobs after November 16, 1995, pensionable salary is calculated as the average monthly pay drawn during the contributory period of service in the last sixty months before exiting from the membership of EPS. Here the maximum pensionable salary is limited to Rs 15,000 per month.
Pension of an EPFO member is calculated as follows:
Monthly pension = (Pensionable salary x pensionable service)/ 70
EPF subscribers who have completed 10 years of service and are below the age of 58 are mandatorily required to obtain Scheme Certificate to draw EPS pension after reaching the age of 58 years. This certificate is issued if you change your job before reaching the superannuation age of 58 years. This certificate facilitates the transfer of your pension amount.
Those who have contributed to EPS for less than 10 years can avail the Scheme Certificate to carry forward his pension amount but it is not mandatory. If the holder of the Scheme Certificate dies before attaining the age of 58 years, then his spouse will get the pension…..Read more>>