In addition to the EPF, a portion of the employer’s contribution is allocated to the Employee Pension Scheme (EPS), providing a pension to employees after attaining the age of 58.
The EPF Pension Scheme, also known as the Employees’ Pension Scheme (EPS), is an integral component of the overall social security and retirement benefits provided under the Employees’ Provident Fund (EPF) in India. The EPS is managed by the Employees’ Provident Fund Organization (EPFO).
In terms of coverage, EPS applies to all employees who are members of the EPF and contribute to the EPF scheme. It is a mandatory component for EPF members.
The EPS is funded by the employer’s contribution to the EPF. A portion of the employer’s contribution (8.33% of the employee’s basic wages and dearness allowance, subject to a maximum of Rs. 15,000) is directed towards the EPS. The pension amount is calculated using a formula that takes into account the average monthly pensionable salary and the length of service.
The pension amount is determined based on the length of the employee’s contributory service. The minimum service period required to be eligible for a pension is ten years of contributory service.
FAQ
The EPF Pension Scheme operates by accumulating a portion of an employee's monthly contributions into a pension fund. Upon retirement age, the accumulated amount is utilised to provide a regular pension income to the employee. The pension amount is determined by factors such as the length of service and contribution history.
Employees covered under the EPF Act are eligible for the EPF Pension Scheme. This includes both private and public sector employees, with certain criteria such as minimum service period and age playing a role in eligibility.
No, employees cannot contribute voluntarily to the EPF Pension Scheme. Contributions are mandatory for eligible employees, and the pension amount is determined based on the mandatory contributions made during the service period.
In the event of premature withdrawal or resignation, employees may be eligible for a withdrawal benefit from the EPF Pension Scheme. However, the amount granted will be subject to specific rules and conditions outlined by the EPF authorities.
Employees can check their EPF Pension Scheme balance or status through the official EPFO (Employees' Provident Fund Organization) website. The online portal provides a facility for members to access their account details, including pension-related information. Additionally, employees may receive periodic statements from their employers detailing their pension contributions and benefits.
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