EPS Full Form

Employee Pension Scheme is the full form of EPS.

Employee Pension Plan (EPS) is a plan or scheme run by the Employees Provident Fund Organisation (EPFO) to protect employees’ financial stability. Workers in the organized sector who retire at the age of 58 are entitled for a pension under the scheme. Employees who participate in this program may be able to earn a guaranteed pension for the rest of their lives.

EPS Enrolment Process

Workers who join the Employees Provident Fund Organisation (EPFO) are automatically enrolled in the Employee Pension Plan. Once you’ve enrolled in the EPF, your employer will contribute 12% of your monthly salary plus the dearness allowance to your retirement fund, and your employer will match your contribution.

Relation Between EPS and your Salary Ceiling

However, the EPS contribution made on your behalf by both your firm and the government is limited by your wage. The highest wage at which EPS would accept employer contributions was INR 6,500 per month till September 2014. The EPS laws were dramatically revised in September 2014, with the wage maximum being raised to INR 15,000 per month. This means that the amount of money paid into the EPS kitty on your behalf each month is capped at INR 1,250 (8.33 percent of actual wage), regardless of your income.

Formula for Calculating the EPS Pension

EPFO once offered an Employee Pension Plan based on an employee’s pay, with a maximum limit of INR 15,000 per year. Following legislative changes, the EPS contribution is now calculated at 8.33% of the employee’s real pay.

EPS Minimum Pension

After retirement, a person’s minimum monthly pension under the Employee Pension Scheme is currently Rs. 1,000. The Union, on the other hand, has long pressed the government to raise the monthly limit to Rs. 5,000.

Maximum EPS Pension

The maximum EPS pension that can be obtained is INR 7,500.

Eligiblity Critera for the Employee Pension Scheme Program?

  • Become an EPFO member.

The first requirement is that you join the EPFO.

  • At least ten years of experience

At least 10 years of active service and an equal number of years of active contributions to the EPF pension plan are required.

  • Employee Pension Scheme Eligibility Age

You must be 58 years old or older. You must be at least 50 years old to receive a reduced rate from the Employee Pension Scheme pension.

How Much Would My Pension Be?

What is a appropriate pension amount? According to some financial gurus, you should have saved 10 times your average working wage by the time you retire. To put it another way, your pension funds are proportional to your pensionable salary and service.

Pension calculation using the EPS formula:

  • Pensionable salary * Pensionable service / 70 = Your Monthly Salary

For instance, if your monthly contribution is INR 30,000, your pension fund should be INR 300,000. Another piece of sound advice is to set away 12.5% of your monthly income.

  • If your monthly pay is $30,000 and your company contributes 8.33% of your salary, the amount in your EPS account is computed as follows:
  • 30000 x 8.33/100 = 2499
  • Pensionable Service is estimated based on your actual service period. The EPS certificate must be filed whenever the employee changes jobs. It should be mentioned that at completion of twenty years of service, the employee is entitled to a two-year bonus.

How Can I Obtain a Certificate from The Employee Pension Scheme?

Form 10C must be completed after you have left your job.

On Form 10C, you have two options:

  • Withdraw EPS 
  • Fill out an application for an EPS Scheme Certificate.

Your employer sends the information to EPFO, which issues you an EPS Scheme Certificate after you choose the options for issuing an EPS Scheme Certificate.

How Can I Ensure a Steady Monthly Income Once I Retire? 

Most people faced a perplexing financial dilemma after the government’s guaranteed pension program was phased out. The 1995 EPS plan, on the other hand, provides a safe haven and financial security. This scheme, which gives a modest but guaranteed stipend to employees with many years of service, may be beneficial to them.

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