EPS - Employee Pension Scheme, EPS Eligibility Calculation & Formula (2024)

Eligibility to avail EPS benefits

The eligibility criteria to avail the EPS benefits are mentioned below:

1. You must be a member of the EPFO.
2. You must have attained the age of 50 years for early pension and 58 years for regular pension.
3. 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.
4. You must have completed at least 10 years of service.'

Features ofEmployee Pension Scheme

The main features of the EPS scheme are mentioned 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. Employees earning a base salary plus DA of Rs.15,000 or less are required to enroll 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.

1. If the widower/widow remarries, the children will be classified as orphans and would receive the additional pension amount.
2. Employees who are enrolled in the EPF scheme will automatically be enrolled in the EPS scheme.
3. The minimum monthly pension amount that the individual will receive is Rs.1,000.
4. In case the widow/widower is receiving the EPS amount, they will continue to receive the amount until his/her death. After that, the children will receive the pension amount until they attain the age of 25 years.
5. In case the child is physically challenged, they will receive the pension amount until his/her death.

Benefits of Employee Pension Scheme

The following are the benefits of Employees’ Pension Scheme:

1. Provides a fixed income after retirement at the age of 58 years or after early retirement at 50 years
2. Allows to withdraw the complete pension sum at the age of 58 years, if member leaves service 10 years prior to 58 years

1. Provides monthly pension to the members who becomes disabled totally and permanently even after not serving the pensionable service period.
2. Provides pension to the member’s family in case of death of the member before or after the pensionable service period

Types of Pensions Under EPS

The different types of pensions under Employees’ Pension Scheme are as follows:

1. Orphan Pension: If a member passes away without leaving behind a spouse, their children are eligible to receive an orphan pension equal to 75% of the monthly pension. From eldest to youngest, the benefit will be available for the two surviving children.
2. Widow and Widower Pension: If an EPS member passes away and leaves a spouse behind, the widow or widower is entitled to a monthly pension. The deceased member must have served for a minimum of one month in order to be eligible.

1. Child Pension:

In addition to monthly widow pension, monthly child pension will also be paid to the surviving children of the family, in case the pensionable member dies. The amount payable is 25% of the widow pension and will be paid until the age of 25 years of the child. The amount is payable for up to a maximum of two children.

1. Reduced Pension:

Pensionable members who have completed 10 years of service and are at least 50 years of age but less than 58 years, can withdraw an early pension. The amount payable is reduced at a rate of 4% for every year less than 58 years.

EPS Eligible service calculation

If an employee has worked for six months or more, his or her service tenure is counted as one year. The working length will not be taken into account if the service period is less than 6 months. As a result, if an employee has worked for ten years and seven months, the number of years of service will be calculated as eleven. However, if a person has worked for ten years and five months, the number of years of service is ten.

Contribution towards Employee Pension Scheme

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:

1. EPF Contribution: 3.67%
2. 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.

Process to check EPS balance

The Universal Account Number can be used to check the EPS balance on the EPFO portal (UAN). Individuals must first finish the UAN activation process.

The step-by-step procedure to check the EPF balance after the activation of UAN is complete is mentioned below:

Step 1:You must visit the official website of EPFO (https://www.epfindia.gov.in/site_en/index.php).

Step 2:Click on 'For Employees' under the 'Our Services' menu.

Step 3:Click on 'Member Passbook' on the next page.

Step 4:Next, enter the User Name (UAN), password, and captcha details. Click on 'Login'.

Step 5:On the next page, various Member IDs will be displayed. Click on the respective Member ID.

Step 6:The total pension amount that has been contributed will be displayed under 'Pension Contribution' column.

Step 7:You will be able to download and take a print out of the statement as well.

Process to calculate monthly Pension

Calculation of monthly pension falls into the 2 categories that are mentioned below:

1. Pension calculation for individuals who have joined before 16 November 1995.
2. Pension calculation for individuals who have joined after 16 November 1995.

The process for the calculation of EPS for the 2 categories are mentioned below:

Calculation of pension if the individual has joined before 16 November 1995:

In case individuals have joined the organisation before 16 November 1995, the amount of pension they receive is fixed and it is based on their salary. Given in the table below is the break-up of the pension amount that an individual will receive:

Calculation of Pension in case the individual has joined after 16 November 1995:

The below-mentioned formula must be used for the calculation of pension in case the individual has joined after 16 November 1995:

EPS = (Service Period x Pensionable Salary)/70

Calculation of Pensionable Salary is based on the average income an individual has made over the last 5 years.

EPS Withdrawal

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

If a person has not completed 10 years of service, he or she will be eligible to withdraw the EPS amount. If the employee is currently employed and has not completed ten years of service, he or she will not be eligible to take EPS funds. The EPS amount can only be withdrawn once the employee has left the company and before starting a new job.

He/she can claim Form 10C on the EPFO portal to withdraw the EPS amount. To withdraw the EPS amount online, the employee must have an active UAN and the KYC details must be linked to the UAN.

Individuals who have worked for less than six months may apply for a scheme certificate, but they will not be allowed to withdraw EPS due to EPFO regulations. Only a portion of the EPS amount can be taken depending on the number of years an individual has worked.

1. 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 filling Form 10C, the employee will be able to apply for a scheme certificate.

EPS forms

There are different EPS forms that are available

What is the procedure to check your EPS Amount

Given below are the steps you will have to follow to check the amount available in your EPS account:

1. Visit the Employees' Provident Fund Organization's (EPFO) official website at https://www.epfindia.gov.in/.
2. Click the ‘For Employees’ link on the homepage's ‘Our Services’ section.

1. Go to ‘Services’ and choose ‘Member Passbook.’
2. A redirect to the Unified Member Portal will take place. Use your password, Universal Account Number (UAN), and captcha code to log in.
3. You will be taken to the Member Passbook page after logging in. You can examine the specifics of your EPF (Employee Provident Fund) account here.
4. The "Pension Contribution" component can be found by scrolling down. Your EPS contributions and the total amount will be described in full in this section.
5. You can examine the balance in your EPS account as well as the donations made to it.

Points to remember about EPS Pension

Before contributing to your EPS account, there are certain points you must remember about EPS pension. They are given below:

1. The employer must make all contributions to the Employees' Pension Scheme (EPS) account.
2. Basic salary plus a dearness allowance, a retention allowance, and the allowable cash worth of food concessions make up the employee's remuneration.
3. The employer is required to cover all applicable contribution costs.

1. 8.33% of the employee's salary is contributed by the employer to EPS.
2. The employer is required to contribute within 15 days of each month's end.
3. For the purpose of receiving pension benefits, a minimum of 10 years of service are required.
4. All workers who are employed by the major employer, whether directly or through a contractor, are required to make contributions.
5. The plan stipulates that a person must be 58 years old to retire.

1. After turning 58 years or when they begin receiving a reduced pension at age 50 years, an employee no longer qualifies as a member of the pension fund.
2. You may withdraw the EPS amount after being out of work for more than two months if you have fewer than ten years of service but more than six months of service.

What happens to the EPS amount in case of a change in jobs?

If a person moves jobs, the EPF amount can be transferred to the new Member ID, but the pension amount cannot be transferred and must remain in the old Member ID. The transfer of service details can be used to trace the number of years an individual has worked. As a result, if someone is working their third job, the EPF account can be aggregated into a single account, but the EPS amount is represented in their different passbooks.

Individuals are eligible to receive pension once they have completed 10 years of service. However, individuals must attain the age of 50 years or 58 years to withdraw the pension amount. In case individuals withdraw the pension amount when they attain the age of 50 years, they will receive a lesser EPS amount. Individuals who have not completed 10 years of service but are unemployed for 2 months or more will be allowed to withdraw the EPS amount.

If an employee is leaving an EPFO-covered company to work for a non-EPFO-covered company, they must get a Scheme Certificate from the EPFO. If you join an EPFO-covered company in the future, you can submit this certificate. The certificate can be presented to the appropriate EPF field office if the individual does not join a company until he or she reaches the age of 50 or 58. Individuals who have worked for multiple employers and have completed less than 10 years of service can also accumulate certifications. Individuals who join another EPFO-covered company, on the other hand, will not require the certificate.