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EPS is a pension scheme made for the organized sector. All EPS members who have completed 9 years and 6 months of their service and have completed 58 years of service will get a pension through EPS Scheme.
An employee, who is a member of EPF, will automatically become a member of EPS. An Employer shares 12% of “Basic Pay + DA” to the employee EPF account, which is divided as below:
A large part of the employer’s share goes towards EPS. An employee’s EPF Account broadly consists of 3 parts:
- Employee pension scheme (EPS)
- Employee Provident Fund (EPF)
- Employee Deposit Linked Insurance (EDLI)
In this article, we will discuss the Employee Pension Scheme (EPS) in greater detail.
Table of Content:
1.Key features of the EPS Scheme
2.EPF Vs EPS
3.How to become a member of an EPS Scheme?
4.Types of pension available through EPS
5.How to calculate the amount of premature EPS Withdrawal?
6.What is EPS Scheme Certificate
7.How much pension can be received under the EPS Scheme?
8.EPS Online services through UMANG App
9.EPS Vs NPS
10.How to find EPS account number from PF number?
1.Key features of EPS-Scheme
Pension is provided in case of retirement or disablement of the member or once he attains 58 years of age. All employees who are the members of EPF will automatically become members of EPS. An employee after joining an organization has an option to opt for EPF if the “Basic Pay+DA” of an employee is greater than Rs.15,000. But, if it is less than Rs.15,000, then it is compulsory to opt for EPF. And, Pension is received by the pensioner for a lifetime.
What happens to EPS corpus after death?
In case of the death of a pensioner, the pension will go to their spouse or children or nominee. As per EPS rules, spouse and 2 children will get the pension after the death of an EPS member.
- 2 children must be below 25 years of age. They will receive 25% of the widow pension until they are 25 years old.
- A disabled child will get 75% of the widow pension share until his/her lifetime.
Unlike other pension schemes such as NPS, where a family gets the accumulated pension corpus. In EPS, the family gets the pension and not the accumulated corpus after the death of an employee.
For the purpose of pension calculation, if the service duration is equal to or more than 6 months, it will be rounded off to 1 year. For example, if you worked for 12 years and 6 months, then your service will be counted as 13 years. However, if you worked for 12 years and 5 months, then the service will be counted only for 12 years.
Contributions of EPS are given as:
- 8.33% of the Employer contribution goes to the EPS account each month.
- The government also contributes to the EPS account by 1.16%.
That is, the government will contribute Rs.180 and an employer will contribute Rs.1250 as the maximum limit towards the EPS scheme of the employee.
Both of the above contributions are limited to a maximum of Rs.15,000 in Basic+DA.
The minimum pension under the EPS Scheme is Rs.1000/- and the maximum pension Rs. 7500/- per month. And the maximum tenure of pension calculation is 35 years.
Unlike EPF, the EPS contributions do not earn any interest.
You are eligible to receive more than one pension through EPS.
2.EPF Vs EPS
What is the difference between EPF and EPS?
EPF (Employee Provident Fund) and EPS (Employee Pension Scheme) are retirement benefits in India. EPF is a savings scheme where both employer and employee contribute, while EPS, funded only by the employer, offers pension benefits.
Upon retirement, EPF allows lump-sum withdrawals, while EPS provides a regular pension based on factors like pensionable service and average salary. Administered by the EPFO, they serve different purposes: EPF accumulates savings, while EPS ensures post-retirement income.
3.How to become a Member in an EPS Scheme?
- All employees who have EPF Account will automatically become a member of EPS Scheme, as mentioned earlier.
- Upon EPS membership, an employee will remain a member till the age of 58 years. Thereafter, an employee will become a pensioner and receives EPS pension and will no longer remain an EPS member.
- Once, the EPF/EPS membership is begun, it cannot be opted-out.
- The pension can be deferred until 60 years of age. For each deferred year, pension increases by 4%.
- There is no EPS membership to the employees joining after 1st September 2014, if the Basic Pay + DA is more than Rs.15,000.
What is EPS number?
The EPS number, or Employee Pension Scheme number, is a unique identification number assigned to individuals who are enrolled in the Employee Pension Scheme (EPS) under the Employees’ Provident Fund Organization (EPFO) in India. This number serves as a reference for tracking and managing the pension benefits of the employee.
It is typically provided by the employer upon enrollment in the EPS and is used for various administrative purposes related to pension contributions, withdrawals, and other transactions within the EPS framework.
4.Types of Pensions available through EPS
i.) Superannuation:
This pension is given to those who have completed 58 years of service or must have completed at least 10 years of service. Pension will be provided after 58 years, whether you are in the service or not.
ii.) Early pension:
Between the age of 50 and before 58 years, if an employee is willing to retire voluntarily, in such case, an early pension can be taken but pension will reduce by 4% of each early retirement year. Also, an employee should have been in service for at least 10 years. And, while receiving early pension employee must not be in service of any sort.
iii.) Pension to Family Members:
- Pension is given to the family members in case of death of the EPS member, provided that an EPS member should have completed at least 1 month of employment. Pension allotment details among family members of the deceased are already explained in the previous section.
- The family member will also receive the pension in case of the death of EPS Pensioner. If the pensioner doesn’t have a family, the pension is given to the nominee and in case, a nominee is not mentioned then the pension is given to one of the parents of the pensioner.
5.How to calculate the amount of premature EPS Withdrawal?
The table shown below is used for the calculation of the withdrawal amount from EPS. It has the number of years of service along with the corresponding factor. This factor is multiplied by “Basic Pay+DA” and the resultant amount you will get on withdrawal.
| Years of Service | Proportion of Wages |
|---|---|
| 1 | 1.02 |
| 2 | 1.99 |
| 3 | 2.98 |
| 4 | 3.99 |
| 5 | 5.02 |
| 6 | 6.07 |
| 7 | 7.13 |
| 8 | 8.22 |
| 9 | 9.33 |
For example, if a person wants to retire after completing 8 years of service and has the “Basic Pay + DA” equals to Rs. 22,000. But, as already mentioned the maximum amount of “Basic Pay+DA” is capped at Rs.15,000 by EPFO.
Therefore, the receivable amount will be:
15,000*8.22 = Rs. 1,23,300/-
Hence, a person who has completed 8 years of service, will receive his EPF Contribution of Rs.1,23,300.
You cannot withdraw your EPS Benefits, under the conditions given below:
- If you have not completed your employment for more than 180 days.
- If you have completed 10 years of service, but you are below 50 years of age.
In the above 2 cases, EPS Scheme Certificate is given to the EPS member, it is described in the next section.
6.What is EPS Scheme Certificate?
EPS Certificate is a certificate issued by the EPFO. If you have worked in an organization for more than 10 years and you want to withdraw from EPS you will not get your money but would get an EPS Scheme certificate, which you can use at age of 60 years to EPFO to get your pension.
A Scheme Certificate in EPFO (Employee Provident Fund Organization) is a document provided to an employee when they leave a job before attaining eligibility for pension under the EPS (Employee Pension Scheme). It certifies the member’s service details, such as the duration of employment and contributions made to the EPS.
This certificate helps preserve pension benefits, allowing the member to transfer the service period to a new employer or to the EPFO if they remain unemployed. It ensures continuity of pension entitlements and facilitates the process of availing pension benefits upon reaching retirement age.
This certificate consists of the basic details and the details of the service of an EPF member, as shown below in a snapshot taken from a sample EPS Certificate:
EPS Scheme Certificate also shows the family details of an employee and the nominee, who is eligible to claim a pension in case of death of the member.
So, who can get an EPS certificate?
Every employee who has an EPF account and is registered under EPFO can get EPS certificate for claiming his/her pension. The EPS balance can be either withdrawn after retirement or it can be claimed as pension by opting EPS certificate depending on the tenure of service and the age of the member, with some of the condition given below:
- If you have completed less than 10 years of service and your age is less than 58 years, then you are eligible either to apply for EPS Scheme Certificate or to withdraw the EPS.
- If you have completed 10 years of service or more and your age is less than 58 years, then you are not allowed to withdraw money from EPS account. But you can apply for the EPS Scheme Certificate, by filling up the Form 10C.
- If you have completed 10+ years of service and your age is more than 58, then you should apply for pension by filling up the Form 10D.
- In case you are joining a new company, then you are supposed to submit your scheme certificate to your new employer. In this process, your past service will get added to the new service and your pension amount will be cumulated.
7.How much pension can be received under the EPS Scheme?
Pension amount can be calculated using the formula given below:
And, the pensionable service is the number of years of service after 15/11/1995.
Average salary is capped at Rs.15,000 and the pensionable service is capped at 35 years.
Therefore, if we calculate the pension amount based on these numbers, we will get:
In a similar way, a pension is calculated for any amount of average salary and any amount of pensionable service.
8.EPS Online Services through UMANG App
You can download UMANG App and click on EPFO icon. You will find a screen as shown below:
Now, you can click “pensioner services”, where you will find 2 options, given in the image below:
You need to provide your EPFO Office details and your date of birth to view your passbook.
And, in order to update your “Jeevan Pramaan” (Life certificate), you need to provide your Aadhar details and registered mobile number. It will be verified through an OTP.
Also, you can submit Form-C details available under “Employee Centric Service”, in order to avail the benefits of EPS Scheme Certificate, as described in the previous section.
9.EPS Vs NPS
EPS (Employee Pension Scheme) and NPS (National Pension System) are both retirement savings schemes in India, but they differ in several aspects.
i.)Nature: EPS is a defined benefit scheme where the pension amount is predetermined based on the employee’s salary and years of service. In contrast, NPS is a defined contribution scheme where the pension amount depends on the contributions made by the individual and the returns
generated on those contributions.
ii.)Coverage: EPS is mandatory for employees covered under the EPF Act, primarily in the organized sector, while NPS is open to all Indian citizens, including those in the unorganized sector.
iii.)Management: EPS is managed by the EPFO (Employee Provident Fund Organization), a statutory body under the Ministry of Labour and Employment, Government of India. NPS, on the other hand, is managed by PFRDA (Pension Fund Regulatory and Development Authority), an autonomous body established by the Government of India.
iv.)Flexibility: NPS offers more flexibility in terms of investment choices, allowing subscribers to choose between different investment options such as equity, corporate bonds, and government securities. EPS does not offer such investment choices.
v.)Portability: EPS benefits are linked to employment and are transferable between employers. NPS benefits are portable across jobs and locations and can be continued even if the individual changes employment.
Overall, while both schemes aim to provide retirement benefits, they operate on different principles and cater to different segments of the population.
10.How to find EPS account number from PF number?
To find your EPS (Employee Pension Scheme) account number from your PF (Provident Fund) number, you can follow these steps:
- Visit EPFO Portal: Go to the official website of the EPFO (Employee Provident Fund Organization).
- Select “Member UAN/Online Services”: Navigate to the “Member UAN/Online Services” section on the EPFO portal’s homepage.
- Login to Your Account: Log in using your UAN (Universal Account Number) and password. If you haven’t activated your UAN, you’ll need to do so first.
- Access & “View” Tab: Once logged in, go to the “View” tab or similar option.
- Select “Service History”: Look for the “Service History” option and click on it. Here, you may find details related to your EPS account, including your EPS account number.
- Check EPS Details: In the service history section, you should be able to view details such as your EPS contribution history and EPS account number associated with your PF number.
By following these steps on the EPFO portal, you should be able to locate your EPS account number using your PF number. If you encounter any difficulties, you can also reach out to your employer’s HR department or the EPFO helpdesk for assistance.
Hope you have found this information on EPS valuable. If you have further queries on EPS, feel free to post them in the comment below.
Very well summarised and extremely relevant. thanks