The EPFO had introduced the EPS Act on 16th November 1995. As per this new act, employees who have EPF accounts are also members of the EPS Act. These employees are eligible to get pension benefits, as mentioned in the EPS Act. The employees will get a monthly pension after retirement, along with other EPS benefits. But, the employee is not eligible to contribute towards the EPS account. Then, who contributes towards the EPS account? The employer contributes towards the EPS account.
In this article, we would get to know the working of the EPS. It would help us in understanding more about the EPS Scheme certificate. The EPS Scheme has tons of rules and cases, based on which the employee can withdraw money from the account. To understand all this in a better way, it is important to know the working of EPS. After that, we would know the various sections of EPS like its features, advantages, and much more.
What Is EPS Scheme Certificate?
The EPS certificate is a certificate which the employee gets from the EPFO. The certificate is issued by the Government of India, the Ministry of Labour, and the EPFO. It consists of details of the employee. The details include the number of service years, family details, and many more. Through this certificate, a person can even know the nominee of the EPS account. The nominee should be a family member. After the death of the employee, the nominee will get a pension. It is a record that the EPFO maintains for the benefit of the employee.
Who Can Get The EPS Certificate?
It is well known that any employee who has an EPF account, he/she becomes a member of the EPS Act. An employee can get the EPS certificate for claiming his/her pension. But, there are some rules for doing that. The person can either withdraw pension amount after retirement or claim for pension. But, for claiming the pension amount, the employee needs an EPS certificate. The EPS certificate is only provided if the person has worked for 180 days or more in the organization.
If an employee has reached 58 but has worked for only 9 years and 8 months, then the EPS shows it as 10. There are certain cases where the employee can file for an EPS certificate. These cases are discussed below.
When Can An Employee Get An EPS Certificate?
Before knowing all the cases, it is important to know the eligibility criteria. Employees who have worked for less than 6 months are eligible for issuing an EPS certificate. If a person has not worked for 10 years and wishes to withdraw the EPS amount, then he/she would have 2 choices. The employee can either claim for the pension benefits or withdraw the whole amount. But, if the employee has worked for more than 10 years, then he/she cannot withdraw the money. In this case, the person has to file for the EPS certificate and claim for pension benefits.
Some of the cases when the employee can file for an EPS certificate is stated below.
i. If An Employee Has Not Worked For 10 Years And His/Her Age Is Less Than 50 Years
Here, the employee can file for an EPS certificate by filling up form number 10C. He/she even has the option of withdrawing the pension amount by filling out the form 10D.
ii. If The Employee Is More Than 50 Years, Has Not Completed 10 Years Of Service But Has Not Yet Reached The Age Of 58
Here, the person can withdraw the pension amount by using form number 10C. The person can also apply for an EPS certificate by using form 10C.
iii. If The Employee Is More Than 50 Years, Has Completed More Than 10 Years Of Service, And Has Not Yet Reached The Age Of 58
If the employee has completed more than 10 years of service, then he/she has to apply for the EPS certificate. The employee can do so by using the form 10C, or he/she can even apply for a reduced pension by filling out form 10D.
iv. If The Employee Has Completed 10 Years Of Service Before Reaching The Age Of 50
As the employee has completed 10 years of service, he/she has to apply for an EPS certificate by using form 10C.
v. If The Employee Is More Than 58 Years Old But Has Not Yet Completed 10 Years Of Service
In this case, the employee has to withdraw the pension amount by filling out form number 10C.
vi. If The Employee Has Completed 10 Years Of Service And Is More Than 58 Years
In this case, the employee has to apply for a pension claim by using form 10D.
How To Apply For EPS Scheme Certificate?
If an employee is leaving the organization, then he/she has to fill out form number 10C. Here, the employee would have two options. The first option is to withdraw the amount from the account. The second option is to apply for an EPS certificate. If the employee wishes to claim the pension benefits, then he/she has to issue the EPS certificate.
After filling out the form, the employer sends your application to the EPFO. The EPFO verifies the details and then provides you with the EPS Scheme Certificate. The process of getting the EPS Certificate depends on the verification process. If all the details in your application are correct, you will get your EPS certificate within a month.
EPS Scheme Certificate For Switching Jobs
If an employee is changing a job, then he/she has the option of either withdrawing the pension money or transferring the amount to the new company. But, these two options are only available if the employee has worked for less than 10 years. In this case, the employee has to fill out the form 10C and select either “withdraw EPS money” or “file for EPS Scheme certificate.” If the employee wishes to withdraw the money, he/she can easily do so by selecting the first option. If the employee selects the second option, the amount will be sent to the new account.
If the employee has a scheme certificate, then he/she has to provide it to the new employer. The new employer will submit the EPS scheme certificate and form 11. After submitting the certificate and form 11, the EPFO transfers the amount into the employee’s new EPF account. If the employee has worked for more than 10 years, then he/she cannot withdraw the money from the EPS account. Here, he/she has to file for the EPS Scheme Certificate.
After leaving the job, the employee has to fill out the form 10C again. The process is the same for every time the employee switches his/her job. With every EPS scheme certificate, the EPFO will mention the number of years the person has worked in the company. But, an employee can only do this until the age of 58. After reaching the age of 58, the employee has to give the EPS certificate to EPFO. After providing the certificate, the person would start getting the pension benefits.
EPS Scheme & It’s Working
The EPS or Employee’s Pension Scheme is a scheme that the EPFO made in the year 1995. The EPFO made this scheme so that the employees can have a safe and secure retirement. With the help of the EPS act, the employees get monthly pension and other benefits. If the employee dies, then his/her spouse and child are eligible for the pension. An employee who is registered under the EPF, he/she becomes a member of the EPS act. But, the main question here is, how does the EPS scheme work? The working of the EPS Act is discussed below.
1. Only the employer can contribute towards the EPS account. From 12% of the employer’s monthly contribution, 8.33% is kept in the employee’s EPS account. Here, the employee cannot contribute to the EPS account. In the case of EPF, the employee can voluntarily contribute more to the EPF account. But, when it comes to the EPS contribution, only the employer can contribute towards it.
2. If an employee has worked for less than 6 months and wishes to withdraw money from the EPS account, he/she cannot do so. As per the rules, an employee can withdraw money from the EPS account if he/she has worked for 180 days.
3. While EPFO and the employer manage the EPF account, the EPS account is only managed by the EPFO.
4. The amount in the EPS account cannot earn any interest. It means that the employee cannot earn any interest on the money in the EPS account.
5. If you are switching jobs, you can either withdraw the whole EPS amount or transfer it to a new account.
What Are The Features Of EPS?
There are certain features of EPS that every employee should know. Below are the salient features of EPS.
- The least monthly pension that an employee can get is INR 1000
- An employee can get pension benefits after reaching the age of 58.
- If the employee wishes to defer the EPS until he/she reaches the age of 60, then he/she will get an increase of 4%. The 4% increase is for every deferred year. For every deferred year, the person would get a hike of 4% in the pension amount.
- The widow/widower of the employee is eligible to get the pension benefits. the widow/widower can get the benefits until he/she dies or gets married again
- If the employee dies and has a child, then the child is eligible to get pension benefits until the age of 25.
- In case the child is disabled in any way, he/she is eligible to receive pension benefits for the entire life.
These were some of the EPS features which state the major points of the EPS act. Moreover, a person needs to get an EPS certificate if he/she wishes to withdraw from the EPS account. Now, the question here is, what is the EPS scheme certificate? Below is the answer to this question. Along with that, there is even a detailed discussion on various parts of the EPS scheme.
1. I have worked for 15 years in a company that has not yet reached the age of 50. Can I withdraw money from my EPS account?
No, you cannot withdraw money from your EPS account since you have worked for more than 10 years in the company. But you have 2 options in front of you. You can either go for the EPS Scheme certificate or withdraw the pension amount. The withdrawal option includes withdrawing the provident fund by using form number 19.
2. What is the use of the EPS Scheme Certificate?
The EPS scheme certificate helps you in transferring your EPS amount. It further helps you in claiming your pension benefits after your retirement.
3. Can I withdraw from my EPS account before 6 months of service?
No, you cannot withdraw money from your EPS account before 6 months of service. It is clearly stated that a person has to work for 180 days to become eligible for withdrawing money from the EPS account. But, you can always issue an EPS Scheme certificate. It will help you get pension benefits if you leave the company or transfer the money if you are switching your job.
4. I have worked for less than 10 years and want to resign from the company. Can I withdraw money from the EPS account or opt for an EPS Scheme Certificate?
If you have worked less than 10 years in a company, you can either withdraw from the EPS account or opt for an EPS scheme certificate. If you do not want to work anymore or switch your job, it is better to go for the withdrawal option. If you are taking the EPS scheme certificate, then you have to submit it to a new employer so that all your EPS money gets transferred to the new company account.
The EPS Scheme certificate helps the employees in transferring the EPS money from one company to another. For people who are constantly changing jobs, the EPS scheme certificate is a boon. It helps the employee to transfer the amount without any difficulty. Moreover, the certificate even states the number of years the person has worked. With the certificate’s help, a person can know the immediate family member who is eligible for getting the pension benefits in case the employee dies.
The employee has to file for a new EPS certificate each time he/she switches job until he/she reaches the age of 58. After reaching the age of 58, the person has to submit the EPS certificate to the EPFO to get the pension benefits. The EPFO completely controls the EPS Act and issues all the EPS Scheme certificates.