Employees Pension Scheme

Employees Pension Scheme is a social security scheme run by the Employees' Provident Fund Organisation (EPFO) for the employees of the organised sector.

Eligibility

1. Be a member of the Employees' Provident Fund Scheme (EPFS), 1952 - Are a member of the ceased Family Pension Scheme 1971 or employed in Factories engaged in Industries specified in Schedule I of the Employees’ Provident Fund and Miscellaneous Provisions Act 1952 or employed in establishments notified and engaging 20 or more employees with a salary/wage less than Rs. 15,000 per month at the date of appointment.
2. Rendered eligible service of 10 years or more where contribution to EPFS has been made.
3. Pension to be received by the member on attaining 58 years of age. Provision of withdrawal benefit also exists.
4. A member, who is permanently and totally disabled during the employment is also eligible for pension.
5. The Family of the member is eligible to receive the pension Pension following the date of death of the member.

Features of the scheme

• A minimum pension of Rs. 1000/- per month to the member and Rs. 250/- per month (an eligible service of 10 years & on attainment of 58 years of age).
• Widow/Widower Monthly Pension is 50% of the Member Pension or Rs.1,000/- whichever is higher.
• Children Monthly Pension (Maximum of 2 children upto the age of 25 years) is 25% of Widow/Widower Pension or Rs.250/- whichever is higher
• Disabled Child Pension is 25% of Widow Pension or Rs.250/- whichever is higher till the life-time of the disabled child.
• Orphan Monthly Pension (without Parent) is 75% of the Widow Pension or Rs.750/- whichever is higher. (Maximum of 2 orphans upto the age of 25 years)
• Nominee Monthly Pension is equal to Widow Pension or Rs.1,000/- whichever is higher.
• Dependent Parent Monthly Pension is equal to Widow Pension or Rs.1,000/- Whichever is higher.
• Lump sum benefit called withdrawal benefit if the member leaves employment or retires before completion of 10 years’ service calculated on the basis of his wages and the number of years of membership. Alternately scheme certificate can be issued which contains the record of present and past service which can be added together making members eligible for pension if total of 10 years service is achieved. 
• It is preferable to opt for scheme certificates in lieu of withdrawal benefit if the member desires to avail pensionary benefit at the time of retirement.
• A member may opt to get extra 4% of pension by deferring pension payment beyond 58 till attainment of 60 years of age.
• Contribution to EPS : An employee contributes 12% of his/her pay towards the EPF account. A matching contribution is also made by the employer. 8.33% of the employee's pay is remitted by the employer to EPS. The Central Government also contributes at the rate of 1.16 per cent of the pay of the members to the Employees' Pension Scheme.

Amendments in EPS 1995

Government of India during June 2024 has amended the Employees’ Pension Scheme (EPS), 1995 to ensure that EPS members with less than 6 months of contributory service also receive withdrawal benefit.

Further, the Central Government has modified the Table D and has ensured that every completed month of service rendered is taken into account to give proportionate withdrawal benefit to the members. The amount of withdrawal benefit will henceforth depend upon the number of completed months of service rendered by the member and the wages on which EPS contribution was received. The above measure has rationalized the payment of withdrawal benefit to members. It is estimated that every year more than 23 lakh members will benefit from this modification of the Table D.

To access the FAQs on Employees Pension Scheme, click here.

To access the Employees Pension Scheme 1995 document, click here.

Source : EPFO

Related resources

1. Services offered by EPFO for members
2. Services offered by EPFO for employers