EPS 95 Pension Latest News

EPS 95 Pension Latest News, Pension Scheme, Calculation, Formula, Eligibility

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EPS 95 Pension Latest News : The government has amended the Employees’ Pension Scheme, 1995, to allow withdrawal benefits even to members who have served for less than six months. This new rule will benefit over 7 lakh EPS members annually, a Press Information Bureau release issued on June 28, 2024 said. Additionally, the government amended Table D to ensure that withdrawal benefits are paid appropriately; this change will benefit over 23 lakh members.

What is EPS 95 Pension Scheme?

EPS 95 Pension Latest News EPS 95, or the Employees’ Pension Scheme 1995, is a social security scheme that was launched by the Employees’ Provident Fund Organisation on 19 November 1995. The scheme provides pension benefits to employees working in the organised sector after retirement. The EPFO manages this system and assures that employees who reach the age of 58 years will receive a pension.

The scheme benefits both existing and new EPF members. Both the contracting parties, which include the employee and the employer, contribute 12% of the employee’s salary, which includes the basic salary and dearness allowance (DA), to the EPF. Every month, an employee’s entire contribution is made to the EPF. On the other hand, 8.33% of the employer’s contribution goes to the Employees’ Pension Scheme, and the remaining 3.67% goes to the Employees’ Provident Fund.

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What is EPS Withdrawal Benefit

EPS 95 Pension Latest News Many participants of EPS 95 exit the scheme even before completing the 10 years of service required to qualify for a pension. These members get a withdrawal bonus under the scheme rules.

So far, the withdrawal benefit was calculated based on the period of contributory service in completed years and the salary on top of which EPS contributions have been paid.

As a result, only those members were eligible for this withdrawal reward who had completed 6 months or more of contributory service. As a result, participants who left the programme before contributing for six months or more did not receive any withdrawal benefit. This resulted in many claims being rejected and disputes as many members left without fulfilling the duty of contributing at least six months. All such EPS members who have not reached the age of 58 years on June 14, 2024, will be eligible for withdrawal benefit.

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EPS 95 Minimum Pension

EPS 95 Pension Latest News No matter how much you contribute to the Employees’ Pension Scheme, a minimum limit of pension has been fixed by the Government of India. Employees will get this amount no matter how much you contribute.

Under this scheme, the government provides a fixed minimum pension ranging from Rs 1,000 to Rs 2,000 monthly to pensioners. It was launched by the government on September 1, 2014 with additional budgetary support to the EPF scheme.

Apart from the employee and employer contributions, the government provides budgetary support of 1.16% of the salary of each employee to the Employees’ Provident Fund Scheme. This additional support from the government will be up to a maximum of Rs 15,000 every month.

Changes in Table D

The central government has amended Table D to calculate the lump sum payment an employee can receive if he leaves the pension scheme before completing 10 years.

As per the notified ‘Table D’, the lump sum withdrawal benefit is now calculated based on the number of months of service completed by an individual. As per the earlier ‘Table D’, the withdrawal benefit was calculated based on the number of completed years of service.

The ‘Table D’ provides the return on contribution in line with the number of months spent in service. For example, for 80 months, the return on the given contribution is 6.78.

EPS 95 Pension Latest News As per the Employees’ Pension Scheme guidelines, if an EPS member completes ten years of qualifying service, he is eligible to receive a pension. In simple terms, a member must contribute to his EPS and EPF accounts for ten years before receiving a pension. If an employee exits the EPS system before the expiry of the 10-year period, a lump sum is paid in lieu of pension.

EPS 95 Pension Eligibility

To opt for the benefits of EPS 95, you must fulfil the following eligibility criteria:
You must be a member of EPFO.
You must have served for at least 10 years.
The retirement age for regular pension is 58 years. If you retire earlier, you can also get pension at a lower rate.
If you wish to receive your pension from the age of 60, you will get an additional 4% every year.
If you have not completed 10 years of service but for more than 6 months, you are eligible to withdraw your EPS amount if you remain unemployed for more than 2 months.
If an employee becomes totally as well as permanently disabled, he will be eligible for monthly pension. He will get monthly pension even if he has not served for the pensionable service period. However, the employee will have to undergo a medical test to confirm if he is unfit to perform the job role due to his disability.
If the employee dies during service then his family members may also be eligible for pension benefits.

EPS 95 Pension Rules

Here is the list of rules regarding the Employees’ Pension Scheme 95:
Employees earning Rs 15,000 or less per month must mandatorily enrol under the scheme.
The employer must make the contribution within 15 days of the close of every month.
If after the death of an employee, his widow or widower remarries, the children will receive pension.
The contribution made by the employee includes basic pay, dearness allowance, admissible cash value of food concessions and retaining allowance.
If you want to transfer EPS online, you can do so using a composite claim form.
EPS 95 Pension Latest News A family member of an EPFO member can avail EPS by submitting multiple forms. Form 10C is for withdrawal before completion of 10 years of service. In case of monthly pension withdrawal after the age of 50, the member must fill Form 10D. To declare that the widow has not remarried, one needs to obtain a non-remarriage certificate. A life certificate is required to certify that the employee is alive.
To check the amount deposited in the EPS account, you can check the EPF passbook. You can download it from the EPF passbook portal. The last column of the passbook will show the monthly contribution to the account.
EPS 95 Pension Latest News If you are changing jobs, you need to fill Form 11 as well as Form 13 and submit them. However, if you already have a Universal Account Number (UAN) and have used Aadhaar as your KYC in the EPF database, submitting only Form 11 will be enough. Form 11 certifies that you are a member of the EPF scheme, while Form 13 is used to transfer your PF balance from your previous company to the new company.

How is EPS 95 pension calculated?

The monthly pension amount that an employee receives depends on the employee’s pensionable service and pensionable salary.

The formula to calculate the monthly pension income of any member employee is as follows:

Member’s Monthly Pension = (Pensionable Salary x Pensionable Service)/70

Pensionable Salary

This is the average monthly salary that an employee receives in the last 60 months before deciding to exit the Employees’ Pension Scheme. This is as per the Supreme Court’s decision on November 4, 2022. Earlier, it was the average monthly salary of the last 12 months of the employee’s participation in the scheme.

Pensionable Service

This refers to the total number of years that one has contributed to the EPS account. As per the law, pensionable service must be rounded off to the nearest year. This means that if you serve for 6 months or more, it will be considered as one year. If it is less than 6 months, the year will not be counted. If you retire at the age of 58 and have served more than 20 years, your service period will increase by 2 years.