INTRODUCTION
The EPS, full form of which is Employee Pension Scheme, is a scheme by Employees’ Provident Fund Organisation(EPFO). The objective of EPS is mainly to provide social security to the individual. The scheme is for pension employees after their retirement at 58 years in the organized sector. Employee contributes 8.33% of his basic+DA (not more than 1250/-) in this pension scheme. In return of which EPFO provides a fixed monthly pension regularly to employee after his retirement. EPFO ie. Employees Provident Fund organization manage EPS Pension Scheme.
ELIGIBILITY CRITERIA FOR EPS:-
The following are the eligibility criteria for EPS:-
*Employee must be an EPFO member
and 58 years or above
*Complete 10 years of active service and equal years of active contribution towards the EPF pension scheme.
*Have attained at least 50 years of age to withdraw from the EPS pension at a lower rate.
*Delay withdrawing the pension by 2 years ie. till he or she is 60 years to become eligible to get an EPS pension at a rate of 4% annually.
DIFFERENT TYPE OF EPF PENSION TYPE
1.Widow pension /Vriddha pension
2.Child pension
3.Orphan Pension
4.Reduced Pension
EPS PENSION FORMS DETAILS: –
First thing to remember that an EPFO member or survivor has to fill various EPS forms. EPS form is required to avail the benefits of the employees Pension scheme depending upon their eligibility criteria.
1.FORM 10C
When a member leaves his current job and join new job, he or she can parallely transfer the EPF amount to a new account.Member may withdraw the amount by submitting an EPS scheme certificate and filling necessary EPS forms concurrently.A person can withdraw the saved pension after a continuous service of 180 days and before 10 years of active service using Form 10C.
2.FORM 10D
Form 10D is a form that a member fills and submit to withdraw monthly pension after attaining the age of 50years. At the same time Form 10D is also used to withdraw monthly child pension and widow pension as applicable.
3.LIFE CERTIFICATE
The EPF member or beneficiary of the pension has to submit life certificate in November of every year basically to certify that he/she is alive. With this in mind this form has to be submitted to the branch manager of the bank by the individual with active pension account detail.
4.NON MARRIAGE CERTIFICATE
This form is declaration that evidently the widow /widower of the pensioner has not remarried. For that reaon this certificate has to be submitted every year in the November by widowed person.
FEATURES OF EPS
A person is eligible to get monthly pension upon attaining 58 years of age if he/she has rendered service for 10 years or more in an EPF registered firm(s),.
If a person is eligible for pension but retires from work before attaining the age of 58 years, EPFO will grant early pension for him/her.In this case EPFO will reduce pension by 4% for each year falling short of 58 years and employee can avail pension only between 50-57 years of age.
An EPS member is eligible to get a minimum pension of Rs. 1,000 and a maximum pension of Rs. 7,500 each month.
If a person decides to exit an organization without rendering the stipulated 10 years of service, he/she is eligible to withdraw the benefits accumulated. Also, the person can continue the service in a different organization by submitting the Pension Scheme Certificate.
If a person is eligible for pension but retires from work at the age of 60 years, he/she can defer the pension with or without any contribution for the additional two years. Deferment of pension will earn an interest of 4% for each additional year.
BENEFITS OF EPS
The member is eligible to get pension, in case of permanent partial or total disability during employment,
In case of death of the member, EPFO entitles his/her family to receive the pension.
The monthly Widow Pension will be 50% of the amount, subject to a minimum of Rs. 1,000 per month.
The monthly Children Pension will be 25% of the monthly Widow Pension, subject to a minimum of Rs. 250 per month.
The monthly Orphan Pension (in case widow pension is not applicable) will be 75% of the monthly Widow Pension, subject to a minimum of Rs. 750 per month.
In case the member dies without leaving behind a spouse or child, the pension will be paid to his/her dependent father or mother.
How to Calculate Your Pension Under EPS
The pension amount in PF depends on the pensionable salary and the pensionable service of the member.
a) Pensionable Salary
The average monthly salary withdrawn by the member in the last 12 months before exiting the Employee Pension Scheme in India is the pensionable salary.
Government has increased the maximum pensionable salary from ₹ 6500 to ₹ 15,000 every month.
b) Pensionable Service
Pensionable Service is the actual service period of an employee or member.
A member calculates the pensionable Service Period by adding all the service rendered by the member to different employers as well.
Following Formula is used to calculate the Pension:-
Monthly pension = Pensionable Salary* Pensionable Service/70
What happens to the EPS amount in case of a change in Job
Before switching employement a person has to submit out two forms:
i) Form11 which certifies that the person is a member of employees Provident Fund(EPF) and
ii) An employee uses Form13 to move PF balance from one company to the current one.
If a person has existing Universal account number(UAN) and EPFO validates Aadhar for KYC in the EPF database , employee may use a composite form 11 to fulfill both the functions. Otherwise a person has to submit both Form 11 & 13.
How does Employee Pension Scheme works
EPS came into existence in 1995 and it facilitated both the new and existing EPF members correspondingly to benefit from this scheme.
Both Employee and employer contribute 12% of the employee basic+DA to the EPF. Every month employee’s complete contribution i.e. 12% is given to EPF. Employer donates 8.3% to Employees Pension Scheme and 3.67% to EPF.
Employees Pension Scheme often called as EPF Pension is a social security scheme operated by the Employees’ Provident Fund Organisation(EPFO). The system provides a pension after retiring at the age of 58 years of employees who work in the organized sector.
The Process to check EPS balance
Follow these steps to check your EPS balance.
1.Visit the official EPFO website ie. https://www.epfindia.gov.in/site_en/index.php
2.First click service tab in the top left corner and then click “For employees” from drop down menu.
3.Click on “Member passbook” under services.
4.On the member passbook page ,log in by using your UAN, password & solving captcha.
5.Click on “Member ID” from drop down and click on the “view passbook” button on the right to display all the pension contribution by the employee till date and total EPS Balance.By clicking on “Download passbook” button an individual may download the PDF version.
CONCLUSION
The EPS scheme is one of the most popular retirement schemes that everyone invests in. In case you are new to this scheme or wish to contribute more, employee may make voluntary contribution. That’s not all; you can also calculate how much you can accumulate by the time you retire using EPF calculator. It helps give you an idea of how much you need to contribute to build your overall retirement corpus or whether the current contribution will be sufficient for you.
