EPS (Employees Pension Scheme)
Pension scheme under EPF where 8.33% of the employer's 12% contribution goes towards pension, capped on a wage of ₹15,000. Members get a monthly pension after age 58 with 10+ years of service.
What is EPS (Employees Pension Scheme)?
The Employees Pension Scheme, 1995 is administered by EPFO and is funded entirely from the employer's share of EPF. Of the employer's 12% contribution, 8.33% (capped at ₹1,250 on a wage of ₹15,000) is diverted to EPS, and the balance goes to EPF. Employees do not contribute separately. A member becomes eligible for monthly pension at 58 if they have at least 10 years of pensionable service. Early pension is available from 50 at a reduced rate. The pension formula is: Pensionable Salary x Pensionable Service / 70. Pensionable salary is the average of the last 60 months' EPS wages (capped at ₹15,000 unless the higher pension option was exercised). Other benefits include widow pension, child pension up to age 25, and orphan pension. The Supreme Court's 2022 judgement allowed eligible members to opt for higher pension based on actual salary.
Formula: Monthly Pension = (Pensionable Salary x Pensionable Service) / 70
Example
Suresh retires at 58 with 30 years of EPS service and pensionable salary ₹15,000. Monthly pension = 15,000 x 30 / 70 = ₹6,428 (rounded). Higher salary option could increase this.
How EPS (Employees Pension Scheme) is used
Check Form 10C/10D options at retirement or job exit. Members with under 10 years of service can withdraw EPS as a lump sum using Form 10C.
EPS (Employees Pension Scheme) FAQs
Who is eligible for EPS pension?
Any EPF member who has completed at least 10 years of pensionable service and has reached 58 years of age. Service across multiple employers can be combined using a Scheme Certificate.
Can I withdraw EPS before completing 10 years?
Yes. Members with less than 10 years of service can withdraw the EPS amount using Form 10C as a lump sum (called withdrawal benefit), or get a Scheme Certificate to retain past service.
What is the maximum EPS contribution per month?
The statutory cap is 8.33% of ₹15,000 = ₹1,250 per month. Members who opted for the higher pension scheme contribute on actual salary, leading to higher EPS deduction and eventually higher pension.