The Central government has notified the much-awaited minimum monthly pension of Rs 1,000 per month to the Employees’ Pension Scheme holders. This scheme is managed by EPFO (Employees’ Provident Fund Organization).
Employees Provident Fund & Employees’ Pension Scheme:
Every month 12% of your “salary” is contributed towards EPF account.
Your employer also contributes 12% of the salary to your EPF a/c. But out of this 12%, 8.33% goes towards EPS and only 3.67% is invested in Employees’ Provident Fund (EPF). You receive the pension amount from The Employees’ Pension Scheme.
Apart from EPF and EPS , your employer also bears three more expenses.
- Contribution towards Employees’ Deposit Linked Insurance(EDLI) – 0.5% of your salary
- EPF Administrative Charges – 1.1% of your salary
- EDLI Charges – 0.01% of your salary
(The “Salary” definition for the purpose of EPF is “ Basic salary + Dearness Allowance + Allowances).
The central government recently released a notification regarding the Employees’ Pension Scheme. Let us now look at the new amendments.
- Under the modified scheme, the minimum monthly pension for widows has been fixed at Rs 1,000 and for children at Rs 250 per month. Similarly for the orphans it has been fixed at Rs 750 per month.
- The amended scheme also provides that the “Pensionable Salary” will be the average monthly pay drawn during the contributory period of service for 60 months preceding the date of exit from membership of the pension fund. Earlier the pensionable salary, which became the basis for computation of pension, was an average monthly pay drawn for 12 months.
- 50 Lakh more formal sector workers can become EPF a/c holders.
- 28 Lakh pensioners will gain from the minimum pension entitlement of Rs 1,000
Latest Article (29-Nov-2017) – ‘How to get higher EPS Pension? Details about the latest Supreme Court Judgement.‘
Inform about these changes to your EPF a/c’s nominee too. Cheers!
i gave annexure K to transfer 1993 joined Pf 17 years of service of old EPS account to current UAN account with non contribution for one years as probationary period and now service of 9 years in current job, how they calculate the basic salary(DA+Bsic) as 15000, or both 6500, 15000,for the new service.
Greetings Mr. Srekanth, I would like to know if there has been any PF pension amendment act passed recently? If yes, then please update me regarding the same. Thanks.
Dear Madhavi,
You may kindly go through below article :
* EPS Pension Commutation (or) Lump-sum Part-Withdrawal of EPS Pension | Latest Amendment
* New EPF Rules 2021 | Latest Amendments
Sir,
This article is useful for eps 95 pensioners in India.
Me being an eps 95 pensioners has subscribed to your website to know the latest updates for which I am thankful.
pfrda
Thank you dear dastagiri ji..
Keep visiting ReLakhs!
Dear Mr. Sreekanth Ji.Reddy,
i served private 5 organisations from 1995 till 2021, every time i opted PF withdrawal when resigned from an organization. what benefits can i get out of EPS ?
Now, Can i merge all EFPF accounts for availing EFPF pension scheme ?
What is the procedure to linkup my old 4 EPS accounts to the fifth existing PF/EFPF Account ? what are the necessities ?
Dear rajivRG,
Did you withdraw EPS balance(s) from all your previous four EPF accounts?
Yes Boss, just need to connect my services for EPS/EFPF.
Dear rajivRG,
As you have withdrawn your EPS balance(s), your service periods do not get carried forward.
Kindly read : What happens to EPS on Transfer of EPF account (or) when you switch Jobs?
Dear Sir,
EPS not withdrawn but PF has been withdrawn, as i served private 5 organisations from 1995 till 2021, every time i opted only, PF withdrawal when resigned from an organization. what benefits can i get out of EPS ?
Now, Can i merge all EFPF accounts for availing EFPF pension scheme ?
What is the procedure to linkup my old 4 EPS accounts to the fifth existing PF/EFPF Account ? what are the necessities ?
Dear rajivRG,
Yes, you can merge the EPS a/cs and claim Periodic pension.
You need to get the funds transferred from previous accounts to the latest one..
Related article : What happens to EPS on Transfer of EPF account (or) when you switch Jobs?
Dear Mr. S.Reddy,
i served private 5 organisations from 1995 till 2021, every time i opted PF withdrawal when resigned from an organization. what benefits can i get out of EPS ?
Now, Can i merge all EFPF accounts for availing EFPF pension scheme ?
What is the procedure to linkup my old 4 EPS accounts to the fifth existing PF/EFPF Account ? what are the necessities ?
Great Article. Its really informative and innovative. keep posting with latest updates. Thanks for sharing.
Hello Mr Sagar. My father retired from HAL during 2002, presently drawing a pension of rs 1000pm, is there any chances of this to be hiked in future? Kindly update the latest development. Thank you.
Dear Kala,
You may go through this related article @ Higher EPS Pension by EPFO – Impact of recent Supreme Court Judgement for EPS Subscribers & Pensioners
Dear Shrikant Sir,
I am regular reader of your blog and it’s much helpful for financial planning to everyone.I am working as officer in RRB in Maharashtra.Just Supreme court has implemented the Old pension scheme to old RRBians before 2010 and NPS COMPULSORY for employees who join after 31/03/2018. They kept option for others to join either EPS-95 or NPS.
I joined the bank in 2017,SO I have to choose between EPS -95 & NPS.I read your articles related with NPS & EPS-95 and inclined more towards NPS.Still i want you guidance about the same.Thanks
Dear Sagar,
Thank you for following my blog posts!
EPF is a safe product whereas NPS is like a mutual fund. Also, you get pension from EPF scheme, in case of NPS, it does not pay Pension, you need to buy one Annuity plan once you retire from an Insurer.
The returns from NPS can be higher than EPF with certain Cons.
So, kindly go through the Pros & Cons of NPS Scheme and take an informed decision.
Kindly read :
* Best NPS Funds 2019 – Top NPS Fund Managers
* Tax Implications of EPF, PPF & NPS Withdrawals (Full / Partial) & Maturity proceeds
* National Pension Scheme (NPS) – Why it is not a good Investment Option?
* Latest NPS Partial Withdrawal rules
Dear Srikanth,
I am in the process of applying for the higher pension, but not very clear what are the forms to be filled and to be endorsed by employers and could not get forms anywhere, somebody told me forms 3A and 6A to be filled for the application., but not clear.
so request to send me the forms required for Higher pension please.
Regards, Ravi SV
Dear Ravi ji,
You can contact your ex-Employer, they will guide you on this!
Kindly check below links, these can be the forms that you are looking out for..
Link -1
Link – 2
Link – 3
Kindly post a format of joint declaration form for application of enhance EPS 95 Pension.
Hi, How to check the Pension being transferred to the present company from previous companu? i have posted this query to PF office as “only the PF amount will be transferred and there will not be transfer of EPS amount from one account to another .Instead , EPS will be transferred in the form of service history as EPS benefits are based only on service and not on the amount contributed to the EPS fund. ” How to check the number of years of service?
Dear Sakthi,
That you can check in the Service history tab in your UAN member portal.
Else, you can also request for Annexure-K from the EPFO by submitting a grievance request through this link..
Related article : What happens to EPS on Transfer of EPF account (or) when you switch Jobs?
Thanks Sreekanth. UAN member portal shows only the current employer service detail. I have logged a request with EPFO for Annexure-K.
MY COLLEGE IS UGC 95% GRANT IN AID COLLEGE. MY MANAGEMENT DEDUCTS OUR PF CONTRIBUTION 10% AND MANAGEMENT ALSO CONTRIBUTES 10% AS EMPLOYER SHARE (ON SALARY +DA). NOW WE REQUEST OUR EMPLOYERS TO RAISE AND CORRECT THE DEDUCTION TO 12% ..SALARY REMAINING THE SAME AS SALARY +DA.
BUT THEY REFUSE TO DO SO. THEY SAY IF WE WILL RAISE TO 12% THEN IT WILL BE WITH CEILING OF SALARY AS 12% OF 15000..NOT OF TOTAL SALARY.
MY QUESTIONS IS:
1. ARE THEY LEGALLY RIGHT TO DEDUCT 10% INSTEAD OF 12%.?
2. WHEN IT IS ALREADY DEDUCTED ON TOTAL SALARY ,CAN IT BE REDUCED TO CEILING LIMIT OF 15000 ?
3. WHAT ARE THE EFFECTS ON PENSION SCHEME IF THEY DO NOT AGREE OUR REQUEST?
Dear tejinder,
12% of basic salary is the minimum contribution from employee or employer side.
An employee can contribute more than 12% as Voluntary PF.
(However, if a person is joining in his first job and if his salary is more than Rs 15,000 then EPS contributions are not done.)
Suggest you (as a group) kindly consult a civil lawyer or CA/CS in this regard.
I have retired from public ltd co. on 30-11- 2015 on age 58 due to superannuation and receiving pension under EPS 1995. Whether I am eligible for full pension as per the new amendment w.e.f 2015, if I remit with interest the with drawn amount of employer’s contribution?
Dear Chandran Ji..I am not sure about this..Kindly contact your ex-employer.
Hi,
I had joined job on 7 June 2007 and just left my jobs on 30 December 2017. At the time of withdrawal of PF amount, my company said that I will not get EPS amount because I have completed 10 years in company. but actually I did job 9 years and 6 months. I did not get this.
So I need clarity that If I want to withdrawal of EPS then what is process?
pls guide me.
Dear Prashant,
I believe it is 30-Dec-2016??
For an employee, the service for six months or more is treated as one year. Therefore, 9 years and six months+ will be considered 10 years.
thank you very much for reply & providing clarity.
Dear Mr Reddy,
I had superannuated from a psu on attaining 58 yrs wef 31.3.14. I joined the organisation on 1.6.79.
My company defaulted in contributing to EPS from july’13 to march’14 at the time of my retirement. Subsequently the default amt was contributed to the EPS fund.
I hv now rcvd a eps pension amt of 1196.00. My salary at retirement and on 16.11.95 was above rs 6500.00 and 2500 respectively.My colleagues retiring earlier with less pay and similar service length are rcvg pension of rs 2000.00 and above per month.
What cld be the basis of my low pension amt.
Dear Gautam Ji..I am not sure about this..You may kindly contact EPFO directly (or) submit your grievance..click here..
Dear Shrikanath REddy,
I want to know whether any amount contributed towards Voluntary Provident Fund goes to Employee pension account as in the case of normal PF Account. Please reply immediately by mail.
Thanks with regards
Dera Shrivathsa..The whole contribution (VPF) made by the employee goes to EPF account only.
Hi how to transfer widow pension scheme 1000 directly to the bank account?what is the procedure to do that?
Dear Charan ..Kindly submit the new bank a/c details to the ex-employer or to the EPFO.
Hi Sreekanth, your site is really very helpful
2 questions:
Is EPS applicable for pvt sector employees also?
And what do we receive post retirement-just the cumulated amount or some intt also on it?
Regards,
Shibani
Dear Shibani,
1 – Yes. A portion of your Employer’s PF deduction goes to EPS.
2 – Interest is not applicable. You will receive monthly pension amount.
how can i cheak my epf account amount
Dear amandeep,
Read:
All you need to know about UAN!
Check EPF a/c balance!
i had some doubt i am withdraw pf amount in old company but i cant withdraw pension amt. but in new company they opened other pf account now can i transfer old pf pension amt to this account
Dear prabhu ..Yes you can transfer.
I have some doubt:
I have worked on Company A from March 2006 to October 2008.
Then I shifted my job and worked on Company B from November 2008 to November 2011.
Then I shifted again to Company C and working there since November 2011.
Both my PF A/Cs in Company A and Company B remained unoperative until April 2015 as I did not transferred the balance in my old PF Accounts to the new Accounts.
I have initiated and get the balance transferred from PF A/Cs of Company A and Company B to Company C in April 2015 and the transfer has already been done and the balance is now reflecting in my New PF A/C.
However, the EPFO did not pay any interest on the amount accumulated on my PF A/Cs in Company A and Company B.
So, my question is:
1) Do I entitle to get the interest for the three years even though the balance transfer from old PF to new PF account is initiated after three year (as in my case)?
2) If yes, what I need to do to get the interest from the EPFO.
Thanks,
Sandeep
Dear Sandeep,
Company A – you have to get interest for the period from 2008 to 2011 (3 years) though no contributions were made, after that the epf a/c would have become in-operative.
Company B – you have to get interest for the period from 20011 to 2014 (3 years) after that the epf a/c would have become in-operative account.
Yes, you are entitled to get interest.
You may contact the nearest EPFO office for details. Contact details are available on EPFO website.
Lest say for 5 years my deduction was Rs 541 per month and for one year my deduction was Rs 1250 per month then while withdrawing at the end of 6 years the calculations would be like 15000*6.4(as per table D) = 96000 or it would be 6500*5.28(as per table D) + 15000*1.02(as per table D) = 34320+15300 = Rs 49620
Employee is wife enrolled in EPF & EPS scheme and husband nominee. If she dies, will her husband get benefit of EPS & EDLI ? How much is sum assured under EDLI scheme for salary of 6,000/-? Also how much she will get monthly pension if she retires now ie after 12 years since enrollment to scheme?
Dear Rakesh,
Nominee will receive pension and remember that the pension received by nominees is taxable (as income from other sources).
Rs 3 Lakh is the max SA offered under EDLI scheme.
Regarding total expected pension, she can contact her employer (as it depends on her & employer’s contributions)
Thanks for the reply.
As i said,
her salary ₹ 6000/-, her EPF contri ₹ 720/-
emp EPF contri ₹ 220/-, emp EPS contri 500/-, emp EDLI contri ₹ 30/- + admin charges.
Then,
What sum assured for EDLI for current contri ?
What will be the pension if one resign after 12 yrs of contri with no change in contri last 12 months?
Hi,
If a person’s investments already meet the 80C limit, is there any benefit in increasing PF contribution beyond the compulsory 12% of basic salary? I understand that interest from EPF is tax exempt and is a safe investment, but is there any other way by which it reduces tax to be paid? In the blog post ratrace2freedom dot blogspot dot in /2014/02/voluntary-provident-fund-vpf.html, it is mentioned that since VPF goes from pre-tax income, it offers 50% higher return than same amount invested in PPF. I do not understand how that was calculated.
If a person’s investments already meet the 80C limit, is there any benefit in increasing PF contribution beyond the compulsory 12% of basic salary? I understand that interest from EPF is tax exempt and is a safe investment, but is there any other way by which it reduces tax to be paid? In the blog post ratrace2freedom.blogspot.in/2014/02/voluntary-provident-fund-vpf.html, it is mentioned that since VPF goes from pre-tax income, it offers 50% higher return than same amount invested in PPF. I do not understand how that was calculated.
Sorry if this query is a repost – tried posting a few times but the comment never showed up in the page.
Dear Guest,
Your comments were routed to SPAM folder by my blog’s anti-spam tool. It has considered your comments as spam, may be because you are not providing correct details (your name and email id) while submitting the comments 🙂
If section 80c limit is fully utilized then there is no benefit (income tax exemption point of view). Someone who has not utilized the section 80c limit, can consider VPF (Voluntary Provident Fund), by contributing more than 12% of his/her salary. The maximum limit remains the same ie Rs 1.5 Lakh (under Section 80c).
WRT to the link…The author of the post tried to emphasize the benefits of investing in VPF over PPF investment. One can invest in PPF after receiving the net salary. Whereas, VPF contribution is made out of Gross salary. That means income tax adjustment has not been done. Assuming 9% interest rate on VPF and 30% income tax slab, the returns generated on VPF investment can be 50% more than the returns generated if invested in PPF. ( Rs 32700 – 21800 = Rs 10,900) ( Rs 10900 / 21800 = 50%)