The Employees’ Pension Scheme (EPS), launched in 1995, is a retirement scheme operated by the EPFO. The scheme is for employees who have worked in the organised sector and retire at the age of 58. To become eligible to receive pension under the EPS, it is necessary that the employee has worked for at least 10 years, which may not be continuous. Under EPS, all EPFO members with a monthly wage (basic+DA) of not more than Rs 15,000 are covered.
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As per the EPFO contribution norms, both the employer and the employee have to contribute 12% of the employee’s basic salary to the EPF fund. However, the entire share of the employee’s contribution goes to the EPF, while the employer’s share is divided into two parts – EPF and EPS contributions. The EPS pension starts for the employee after reaching the age of 58. At the age of 50, however, a person can start receiving early pension but at a reduced rate of 4% for each year. In this story, we will discuss various types of pension under the EPS scheme one can receive.
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EPFO: Types of pension under the EPS
EPFO (Employees Provident Fund Organization) has 7 types of pension provision under the EPS scheme for those working in the private sector. When a worker deposits 12% of his basic salary in the EPF account, the company also contributes the same amount. Out of this, 8.33% goes to the EPS, and 3.67% to EPF. EPFO has made many rules for pension, such as pension can also be available in case of disability or death of a member.
Here are the types of pension offered by EPFO:
Retirement Pension: It is given after 10 years of service or at the age of 58.
Early Pension: Granted at the age of 50 years and on completion of 10 years of service, but the pension is reduced by 4% every year on availing it.
Disability Pension: It is granted in case of temporary or permanent disability, and there is no age or service condition for it.
Widow and Child Pension: On the death of the member, the widow and children below the age of 25 years are entitled to the pension.
Orphan Pension: If both the member and his wife die, the children below the age of 25 years will get the pension.
Nominee Pension: The nominee gets the pension after the death of the member, if he has filled the e-nomination form.
Dependent Parents Pension: If a single member dies, his parents will get the pension.
Through these pension types, the EPFO provides social security to its members.
