The Employees’ Pension Scheme (EPS), run by the Employees’ Provident Fund Organisation (EPFO), is one of India’s largest social security programmes. Under this scheme, employees receive a monthly pension based on their service period and salary. Launched on November 16, 1995, the EPS is designed to provide regular income to organised sector employees after retirement.
Key features of EPS:
Minimum service period for pension eligibility: 10 years
Pension commencement age: 58 years
Minimum monthly pension: Rs 1,000
Maximum monthly pension: Rs 7,500
Eligibility criteria for EPS:
To be eligible for an EPS pension, an employee must meet certain criteria. Firstly, he or she must have completed a minimum of 10 years of service. Additionally, the employee must be at least 58 years old, as pensions under EPS commence at this age. The employee must also be a registered member of the EPFO and should have consistently contributed to the EPS scheme throughout their employment.
EPF members contribute 12% of their basic pay towards the provident fund regulated by the EPFO, with employers matching this contribution. The employer’s contribution is divided into two parts: 8.33% is allocated to the EPS, while 3.67% goes towards the EPF scheme.
Since 2014, the Centre has set the minimum pension under the EPS-1995 at Rs 1,000 per month. However, there have been long-standing demands to raise this pension to at least Rs 7,500 per month.
Also read: Budget 2025: Minimum EPS pension to be raised to Rs 7,500? Everything you need to know about FM-pensioners’ meeting!
How much pension can an EPS member expect if they work for the mandatory 10 years required for EPS pension eligibility?
EPS Pension Calculation Formula:
The monthly pension is calculated using the following formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) / 70
Pensionable Salary: The average of the last 60 months’ salary (maximum Rs 15,000)
Pensionable Service: Total years of service contributed to EPS.
For example, if an employee’s pensionable salary is Rs 15,000 and pensionable service is only 10 years, the monthly pension would be:
Monthly Pension = (Rs 15,000 × 10) / 70 = Rs 2,143
The example shows that even with the minimum service period of 10 years,
» Read More
