Employees’ pension scheme (EPS) was introduced on Nov 16, 1995, replacing the Employees’ Family Pension Scheme, 1971. This is a social security scheme offered by the Employees’ Provident Fund Organisation (EPFO).
The new scheme (EPS, 1995) has a provision to give pension to EPF subscribers as well as to the family members and nominees of subscribers.
When do you become eligible for pension?
To become eligible for pension, subscribers must have spent a minimum of 10 years or more in the service and retire after attaining the age of 58 years. Alternatively, if an EPF subscriber has attained the age of 58, s/he becomes eligible for pension even if s/he has not retired.
Alternatively, if the subscriber has attained the age of 50 and already spent longer than 10 years in the service as an EPF subscriber is eligible to receive the pension.
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How to calculate pension?
In order to calculate the amount of pension, one should remember that it is based on two key factors: number of years for which contribution has been made towards the pension, and the average salary during the 60 months before retirement.
However, one can find out the amount of pension by visiting the EPF website and following the steps mentioned below:
A. Check the link: epfindia.gov.in and go to ‘online services’ on the left side corner.
B. Here you need to click the slug ‘EDLI & Pension Calculator’, which takes you to a new webpage.
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C. Here, you can access the ‘EDLI & Pension Calculator’. But prior to this, you may want to explore ‘how to use a pension calculator’ on the same webpage.
D. When you click the EDLI & pension calculator, you are taken to a new webpage where you can enter inputs to find out the pension amount.
Age matters
Remember that EPF subscribers are entitled to receive pension when they have spent a minimum of 10 years in the service. And if they have spent 20 years and longer, they are entitled to receive a two years bonus too.
And when a subscriber retires after the age of 50 but before 58, s/he can claim pension at lower rates.
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Lower rates imply 4 percent lower pension for each year less than 58. For instance, when someone retires at 56, s/he will be entitled to receive eight percent lower pension.
One can even retire beyond 58, and becomes entitled to receive four percent higher pension for each extra year till 60.
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Published: 24 May 2024, 05:11 PM IST