In 1995, the Employee Pension Scheme (EPS) was introduced. The main objective of this program is to support employees working in the organized sector. Here’s everything you need to know about employee pensions.
Employee retirement program
Employees working in the organized sector spend most of their valuable time working in this sector and hence deserve some benefits to financially protect their lives. That’s where the Employee Pension Scheme (EPS) comes into play. Introduced in 1995, the scheme is aimed at supporting organized sector employees. It is interesting to note that all employees eligible for the Employee Provident Fund (EPF) scheme will also be eligible for the Employee Pension Scheme.
Understand more about the Employee Pension Scheme (EPS)!
Employees Provident Fund Organization (EPFO) is an organization that ensures that employees get pension after they turn 58. The benefits of this scheme are given to both new and existing members EPF’s current status. The system works on the principle that both the employer and employee contribute 12% of the employee’s basic salary and invaluable allowance to the EPF. While the entire employee share goes into EPF, the employer’s contribution at 8.33% goes into EPS. When employees retire, this plan provides a steady source of income, creating a solid foundation for a post-retirement lifestyle.
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Key features to talk about
Pensions for employees help workers have a comfortable life, without having to worry about the rainy days of old age. Here are some important features that one must know about the EPS diagram:
- Employee Pension Scheme (EPS) is sponsored by the Government of India. This means guaranteed profits. This also implies that there is absolutely no risk when investing in an EPS scheme. Additionally, the refund amount will be fixed and no changes will be made.
- Employees who are earning a basic salary along with a DA of Rs 15,000 or less must apply for this scheme.
- When is a person eligible to withdraw EPS? At age 50. However, it is important to note that the amount received will have a reduced interest rate.
- If the widow/widower receives an amount from the Employee Pension Scheme (EPS), he or she will receive the amount until his or her death. After death, the children will receive a pension until they reach the age of 25.
- In case the widow remarries, the children will be considered orphans. So they will receive an additional pension.
- In case the child has physical difficulties, the child will receive the allowance until the child’s death.
- Employees enrolled in the Employee Provident Fund (EPF) scheme will certainly be eligible for the Employee Pension Scheme (EPS).
- The minimum monthly pension amount that an individual will receive is Rs 1,000.
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Benefits to discuss
- Employee retirement plans come with countless benefits. Tell us all of them, one by one.
- The Employee Pension Scheme (EPS) provides a fixed income after retirement at age 58 or early retirement at age 50.
- This program allows the full pension amount to be withdrawn at age 58, in case the member leaves the military 10 years before age 58.
- This scheme provides a sense of relief as it provides monthly pension to individuals who are totally and permanently disabled despite not meeting the pension deadline.
- The scheme provides pension to the member’s family in case the member dies before or after the pensionable period of service.
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Source: pagasa.edu.vn