Employee Pension Scheme in Provident Fund

Index:-

What is EPS?

Eligibility to avail EPS Benefits

Features of EPS

EPS Eligibility Service Calculation

Contribution towards EPS

How to Check EPS Balance

EPS Withdrawal Rule

What is EPS?

The scheme managed by the Employees Provident Fund Organisation and ensures that employees receive a pension once they attain the age of 58 years old. Existing, as well as new EPF members, can avail of the benefits of the scheme. The employee and employer each contribute 12% of the employee’s basic salary and Dearness Allowance (DA) towards EPF. While the entire share of the employee is contributed towards EPF, 8.33% of the employer’s share goes towards EPS. EPS removes income problems to employees after retirement.

Eligibility to avail EPS Benefits

1. The eligibility criteria to avail the EPS benefits are mentioned below:
2. You must be a member of the EPFO.
3. You must have attained the age of 58 years.
4. In case you defer the pension for 2 years (until you reach the age of 60 years), you will be eligible to receive the pension at an additional rate of 4% per year.
5. You must have completed at least 10 years of service.

Features of EPS

The main features of the EPS scheme are mention below

1. Since EPS is sponsored by the Indian Government, the returns are guaranteed and there are no risks to invest in the scheme. The amount that will be returned will be fixed and no changes will be made.
2. It is mandatory for employees who earn a basic salary plus DA of Rs.15,000 or less to enrol in the scheme.
3. You will be able to withdraw the EPS once you attain the age of 50 years. However, the amount that you receive will be at a reduced rate of interest.
4. In case the widower/widow gets remarried, the children will receive the enhanced pension amount and they will be categorized as orphans.
5. Employees who are enrolled in the EPF scheme will automatically be enrolled in the EPS scheme.
6. The minimum monthly pension amount that the individual will receive is Rs. 1, 000.
7. If the death of a worker then his spouse is eligible for pension amount and in case of spouse death then their children are eligible for pension amount at the age of 25 years.
8. In case the child is physically challenged, they will receive the pension amount until his/her death.

EPS Eligibility Service Calculation

In case an employee has worked for 6 months or more, the service period will be considered as 1 year. However, if the service period is less than 6 months, the working duration will not be taken into account. Therefore, if an employee has worked for 10 years and 7 months, the number of years of service will be taken as 11. However, if the employee has worked for 10 years and 5 months, the number of years of service will be considered as 10.

Contribution towards EPS

The employer and employee contribute 12% of the employee’s basic salary and DA towards the EPF scheme. The 12% contribution made by the employer is split in the below-mentioned ways:

EPF Contribution: 3.67%

EPS Contribution: 8.33%

Apart from the above-mentioned contributions, the Government of India contributes 1.16% as well. Employees are not eligible to contribute to the scheme.

How to Check EPS Balance

The EPS balance can be checked on the EPFO portal with the help of the Universal Account Number. However, individuals must complete the UAN activation process first. The step-by-step procedure to check the EPF balance after the activation of UAN is complete is mentioned below:

1. You must visit the official website of EPFO (https://www.epfindia.gov.in/site_en/index.php).
2. Click on ‘For Employees’ under the ‘Our Services’ menu.
3. Click on ‘Member Passbook’ on the next page.
4. Next, enter the User Name (UAN), password, and captcha details. Click on ‘Login’.
5. On the next page, various Member IDs will be displayed. Click on the respective Member ID.
6. The total pension amount that has been contributed will be displayed under ‘Pension Contribution’ column.

EPS Withdrawal

1. If an individual has worked for less than 10 years

An individual will be able to withdraw the EPS amount if he/she hasn’t completed 10 years of service. However, if the employee is currently working and has not finished 10 years of service, he/she will not be able to withdraw EPS amount. Only once the individual quits the company and before joining a new company can the EPS amount be withdrawn.

He/she can withdraw the EPS amount on the EPFO Portal by claiming Form 10C. The employee will need to have an active UAN and the KYC Detail must be linked to the UAN in  order to withdraw the EPS amount online.

An individual who has worked for less than 6 months can apply for a scheme certificate but will not be able to withdraw EPS as per the EPFO rules. Depending upon the number of  years an individual has worked, only a percentage of the EPS amount can be withdrawn.

2. If an individual has worked for more than 10 years

EPS withdrawal benefits will be stopped if the employee has completed more than 10 years of service. However, by filing Form 10C, the employee will be able to apply for a scheme certificate.