As the name suggests, the Employee pension scheme is a pension scheme incorporated by India’s government for salaried employees. Apart from being a salaried employee, it becomes crucial for the employee to contribute to the Employee’s provident fund account to be eligible for the EPS scheme. Employees can contribute to this scheme if the Employer has more than 20 employees working under the organization. Moreover, if you have a basic pay of fewer than 15000 Rs, employees must contribute to the EPF account. It might get you thinking about why you should consider the EPS pension scheme for your retirement plans. Furthermore, what is the purpose of the Employees pension scheme? So, in this article, you would have an answer for the same.
Purpose Of The Employees Pension Scheme (EPS)
It has been seen that employees in the later stages of their life, usually around the age of 60s. Become dependent on their children for financial needs. This is especially prevalent when the employee had lower basic pay and was left with nearly no money to save it for the future. So, these employees who had performed their services with dedication remained neglected. They are forced to abide by the harsh words and conditions they are subjected to by their young ones. So, the EPS scheme’s major purpose is to make the employees financially stable even in the later stages of their life. Under this scheme, the employee would receive a fixed monthly pension from the government to look after their basic needs. But for the same, the employee has to provide at least 10 years of service before the age of 58.
Sometimes, an employee faces a life-threatening situation that comes at the door knocking. Also, employees engaged in India security services are liable to face these situations more often than not. This could lead to the total disablement of the individual during the service. Under this situation, the employee is subjected to a lifetime pension. If the individual is declared unfit for the job under the medical examination performed by government officials, then he/she gets a lifetime pension irrespective of his/her contribution to the EPF and EPS account. But for the same, the employee has to be a member of EPF.
There might be a case wherein the employee gets deceased due to an unexpected turn of events. This would render the family with avoiding that can’t be filled. This would also lead to losing on to an earning hand of the family. So, the EPS scheme helps the family to look after their basic needs. The immediate family member is subjected to a respectable pension guaranteed by the EPFO. And this family member can use this to fulfill their requirements.
The EPS scheme was devised in 1995, considering the above-mentioned scenarios, and since then, there has been a lot of improvement in the life of employees after their retirement. This has empowered employees to look for themselves even after retirement. Moreover, the guidelines related to the employee’s disablement and death have provided a sense of relief within the individuals regarding their family once they leave for their services. This has been crucial for the individuals employed in the security services of the country. And as an employee, you should always consider the EPS scheme contribution to safeguarding your and your family’s future.