EPS or Employees Pension Scheme has made a life for the pensioners a lot easier. It is well known that after retirement, the pension is the sole source of income for the pensioners. In such cases, the pensioner must know about the various features of the EPS act. There are various types of forms and pension schemes that an employee should know of. Here, we will discuss the various aspects of EPS. It will help you understand the EPS act not to face any difficulty.
The Employees Pension Scheme EPS Act, 1995, is the newest pension act that has covered all the major aspects of pension. There are various types of pension, based on certain cases. One needs to understand the EPS act before proceeding to avail of the pension benefits. Here, we are trying to help you in simply understanding the pension act.
Working Of Employees Pension Scheme(EPS) Act
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Before knowing the various types of pension, it is important to understand the working of Employees Pension Scheme (EPS). The employer has to contribute 12% of his/her monthly salary towards the EPF account. The EPFO had made this rule. But, the whole 12% will not go to the EPF account. Out of the 12%, 8.33% will go to the EPS account, whereas the remaining amount will get transferred to the EPF account. The employee cannot contribute towards the EPS Account. The employee is only eligible to contribute towards the EPF Account. For the EPS account, only the employer can contribute. In some cases, the government contributes around 2% towards the account.
Other than that, there is no contribution made towards the Employees Pension Scheme (EPS) account. The employee can withdraw the amount from the EPS account after working for 6 months. But, if they want to claim the pension benefits, the employee has to work in the company until he/she reaches the age of 58. Besides that, the person also has to complete the 10 year service period. Only after that, the employee will become eligible for getting monthly pension benefits.
Check Your EPF Pension Status
You can check your pension amount and status by visiting the website for pensioners. The website is https://mis.epfindia.gov.in/PensionPaymentEnquiry/. This particular website deals with all the pension related queries. You have to enter your Jeevan Pramaan ID. After doing that, you would get to see your pension status and other details. Another method by which you know your pension status is below
i. Visit the official website of EPFO.
ii. Click on the “Pensioners portal” option. You can see this option in the “online services” tab.
iii. After clicking on the “pensioners portal,” you will see a new screen on your device. Here, you have to select the “Know you pension status” from the drop-down menu on the left-hand side of the screen.
iv. Enter your Jeevan Pramaan ID in the dialogue box and click on the “Submit” option
v. You would now get to see the status of your pension application.
Usually, the EPFO takes around 30 days to sanction the pension. You have to fill out the forms and then submit it to your employer. After the employer signs the forms, he/she will forward it to the Pension Disbursing Agencies. Here, the official will view the documents and then verify it as per the registry details. Once the verification is over, you will start getting a pension from the next month.
There are various benefits that an employee and his/her family members can get from EPS. We know that a person who has worked for more than 10 years can get a monthly pension from the company. If the employee has already reached the age of 58, then he/she has to fill out the form 10D. By filling out this form, the employee can claim the pension benefits from the company.
An employee can withdraw a pension amount from the account if he/she has not worked for 10 years. In this case, the employee has to fill out the form 10C and withdraw the whole pension amount from the account. If an employee is switching jobs, it is unnecessary to withdraw money from the pension account. In this case, the employee can opt for a “Scheme certificate” and transfer the pension amount.
An employee is eligible for a monthly pension if he/she completes 10 years of service during retirement. If the person has reached the age of 58 but has worked for less than 10 years, then he/she can get a monthly pension by filling out the form 10C. This is an exceptional case as the person has reached the age of retirement and will not work anymore.
In case an employee becomes disabled during the time of service, he/she is eligible for a lifetime pension from the organization. For claiming the lifetime pension, the employee has to undergo a medical examination. If the results state that the person is unfit, the employee can get a lifetime pension.
If the employee dies during his/her term of service, the family members can get pension benefits. If the employee was not married, then his/her parents will get the pension benefits from the company. In case the employee had a spouse and child, both widow and the child will get pension benefits. The EPFO has made these rules in the Employees Pension Scheme (EPS) Act, 1995. Here, the spouse will get the widow pension while the child will get the child pension. The widow pension is valid until the spouse dies or marries again. But, the child pension is only valid until the child reaches the age of 25.
Features Of Employee Pension Scheme (EPS) Act
Before going through the various parts of the EPS Act, it is important to know the EPS Act features. Here are the essential features of the EPS, which every pensioner must know.
- The Employees Pension Scheme (EPS) is an initiative by the government. It is completely secure, and one can safely invest money here.
- The EPS scheme is mandatory for employees earning less than INR 15,000
- Only government employees are eligible to become a member of the EPS.
- Employees who are members of the EPF act are also members of the EPS Act.
- The least amount of pension that a person can get is INR 1000
- In case the employee dies, the spouse and kids of the employee are eligible to get the pension.
These are some of the essential features of the EPS Act, which summarises the act in brief. Apart from this, there are various aspects which you can find below.
The government has stated eligibility criteria for the EPS. An employee should fulfill these criteria to avail of the pension benefits. One of the most important things to keep in mind is that the EPS Act is only for government employees. Other than that, here are eligibility criteria that the employee should fulfill.
i. The employee must be a member of the EPFO.
ii. The employee must have attained the age of 58 years.
iii. A minimum of 10 years of service is mandatory for claiming pension benefits.
An employee can opt for deferring the pension amount by 2 years. For every deferred year, the employee will get an increase of 4% for the amount. The employee must have a service period of 10 years to claim the pension benefits. If the person has worked for less than 10 years, then he/she can withdraw the pension amount from the account. We would discuss this topic later on.
What Are The Types Of Pension?
There are various types of pension that the Employees Pension Scheme (EPS) has introduced while forming the act. There are 4 types of pension. The widow pension, child pension, orphan pension, and reduced pension. Each of these pensions is discussed in detail in the below sections.
1. Reduced Pension
If a person has reached 50, he/she can opt for this type of pension. But, the employee must have worked for 10 years to get this pension. The reduced pension is for employees who want to leave the organization after reaching the age of 50. They will receive monthly pension benefits, but the pension amount will be less. Any employee in the age group of 50-58, who has completed the 10-year service period, can opt for this pension type. Another thing to notice here is that the pension amount decreases by up to 4% every year in this pension type. The pension amount will decrease until the employee reaches the age of 58.
2. Widow Pension
The widow pension is designed for the spouse of the deceased employee. In case the employee dies, the spouse of the employee is eligible to receive a widow pension. The amount of widow pension is calculated as per the table C of the employee’s pension scheme, 1995. The widow/widower is eligible to get the monthly pension benefits until he/she marries again. To avail of the widow pension, the widow/widower must provide the non-remarriage certificate. The last pension amount is INR 1000, as for now.
3. Child Pension
If the deceased employee had a child, then the child can get a pension. In case the employee had more than 3 kids, the first 2 children will get the pension amount. Here, the child can get the pension amount until he/she reaches the age of 25. For availing of the monthly pension, the child has to provide a birth certificate as proof to the EPFO. The child will get 25% of the widow pension every month until the age of 25.
iv. Orphan Pension
A child with no parent is eligible to get an orphan pension if one of the parents was a member of EPFO. In case the employee had a spouse, who married again, then the EPFO will state the child as an “orphan.” In this case, the child will get 75% of the widow pension every month.
These were the 4 most important pension types that the Employees Pension Scheme introduced in the EPS Act, 1995. Each pension type is for a distinct case so that the immediate family members do not have to suffer. In case the employee’s marital status was single, then the parents will get the pension. If the employee had no family members, then the nominee will get the pension benefits. Usually, a family member is a nominee, but if the employee has no family, then he/she can appoint anyone as the nominee. In this case, the nominee is eligible to get pension benefits as well as the EPF benefits.
1. I have transferred my pension amount. The website is not showing my pension amount but is showing my transfer amount in the passbook. Is my EPS transferred?
2. I am the only child of my parent who died a few months ago. Am I eligible to get a monthly pension?
3. My mother is getting a widow pension while I am not getting any child pension. Why is it so?
4. Can I nominate my friend for my Employees Pension Scheme (EPS) account?
The Employees Pension Scheme (EPS) Act is for the benefit of the pensioners. Through the employee’s pension scheme, the pensioners can get tons of benefits. It would help them to live a secure life after retirement. After retirement, the EPFO will provide the employees with a monthly pension. You have to fulfill all the eligibility criteria to avail of the pension benefits from the EPFO. Moreover, make sure that the documents are true and up to the mark. If the EPFO finds any documents missing, then it might lead to rejection of the pension claim.