EPS Scheme: Employee Pension Scheme: After providing basic details for Employee Provident Fund, Here we are providing complete details for Employee Pension Scheme. In this article you can find everything you want to know about Employee Pension Scheme like – Details for Employee’s Pension Scheme 1995, Rules for Eligible employees, No contribution on above 15000 – for new members, Pensionable salary for pension calculation, Main purpose of this scheme etc. Now you can scroll down below and check complete details regarding Employee Pension Scheme.
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Employee Pension Scheme, 1995 :
Family pension scheme was replaced with Employee Pension Scheme by the government of India ,with an aim of providing pension to those who are no longer able to earn.
Focus is on :
- pension on disablement,
- widow pension, and
- pension for nominees.
Eligible employees :
Unlike earlier , New members who are joining on or after 1 September, 2014 ,drawing wages exceeding INR 15,000 per month shall not be eligible to voluntarily contribute to the Pension Scheme. This means all those whose salary is below 15000 are eligible for this scheme.
Persons who were members of the Pension Scheme before September 1, 2014 would continue as such members, and contribute 8.33% of their monthly pay to the Employees Pension Fund. However the government will continue its contribution of 1.17% of employee’s monthly pay.
Must Read – National Pension Scheme
No contribution on above 15000 – for new members :
As per 11(3) of EPS scheme , the option to contribute to Pension Fund on a monthly pay higher than Rs. 15,000/- is no longer available to “new resident members”.
This provision does not affect persons who were already contributing to Pension Fund on a higher salary before September 1, 2014. Such persons may continue to contribute on salary exceeding Rs. 15,000/- per month, subject to the conditions specified in the statue.
Pensionable salary for pension calculation :
The pensionable salary shall be calculated on the average monthly pay for the contribution period of the last 60 months earlier to the amendments brought in 2014 which was 12 months preceding the date of exit from the employment.
Must Read – Employee Provident Fund
Main purpose of this scheme :
1) Superannuation Pension:
Member who has completed eligible service of 20 years and retires on attaining the age of 58 years or the age as amended by the law that are in the time being in force.
2) Retiring Pension:
member who has rendered eligible service of 20 years and retires or otherwise ceases to be in employment before attaining the age of 58 years .
3) Permanent Total Disablement Pension : It is payable when employee becomes permanently disabled to work.
4) Short service Pension:
Member has to render eligible service of 10 years and more but less than 20 years.
Monthly pension :
Monthly pension = ( Pensionable salary * Pensionable service) / 70.
However the law has brought the rule of minimum pension for month for the financial year 2014-15.