As per the EPS Act, an employee who has retired is eligible to get a monthly pension. The employee is eligible only if he/she has worked for 10 years and retired at the age of 58. The major question in this article is the Pension Payment Enquiry or how much amount will the retired person get in a pension? The pension amount is different for different employees. The EPFO uses a common formula to calculate the monthly pension for each employee.
The EPS Act has benefits not only for the employee but also for his/her family members. There are certain rules which the new EPS act has in it. The employee is eligible for the pension benefits if he/she has worked for 10 years or more and has retired at the age of 58. Apart from this, the EPS even allows the employee to withdraw money from the EPS account after 50. Though the EPS amount in which the employee withdraws is taxable, it can be of a lot of help. Due to the new EPS act, even the government contributes towards the account every month.
Another major thing to focus on is the monthly pension for employees who retired before 1995. The EPS act came into action on 16th November 1995. This act brought tons of benefits for the retired employees. It had a monthly pension, higher interest rates, and several other advantages too. But this act is applicable for employees who have started working after 1995. So, what about the employees who retired before the new pension act came into action? Are they eligible for getting the pension benefits as per the new act? We will answer each of these questions. But, before that, you need to know the various types of EPS.
Calculation Of Pension As Per The EPS Act
One of the most important things while going through the EPS Act is the calculation of pension. Here, the monthly pension amount for a member is calculated by using the formula below.
[Employee’s monthly salary= (Pensionable salary*pensionable service)/70]
Now, there are 2 terms in the above formula, which are a bit confusing. For better understanding, we have easily discussed the terms in the below sections.
i. Pensionable Salary
The major question here is, “What is the pensionable salary?” The pensionable salary is the average monthly salary of the employee before he/she left. The pensionable salary is calculated until the year the person worked in the company.
ii. Pensionable Service
Pensionable service is the total duration of the service of the employee. How is this pensionable service calculated? You can know the pensionable service by adding up the service days under each employer. If you are switching from one company to another, you need to provide your EPS scheme certificate. With the EPS Scheme certificate’s help, you can transfer the pension amount to a new account.
It is known that an employee can withdraw the pension money before the age of 58, unlike EPF money. For doing so, the employee must have worked for at least 10 years in the organization. Unlike the EPF money, the pension money is taxable, and a person has to pay the tax based on the amount of pension money.
How To Calculate Monthly Pension?
It is well known that the EPS Act came into action on 16th November 1995. But, what about the employees who were working before the formation of the EPS Act? How will the organization calculate the pension for such employees? This makes us divide the calculation of monthly pension into 2 categories. These two categories are as follows.
- Monthly pension calculation for employees who joined the company before 16th November 1995
- Monthly pension calculation for employees who joined the company after 16th November 1995
If you had joined a company before the EPS Act came into action in 1995, then your pension amount is stationary. In simple language, the pension money for such employees is based on their salary. This pension amount cannot change for such employees. If an employee receives a monthly salary of INR 2,500 or less, then his/her monthly pension will be INR 80. Below is the detailed list of monthly pension for employees who had joined the company before the EPS Act came into action.
The figures in the table above are the monthly pension of the employees that had joined a company before the EPS Act came into action. The same is not in the case for employees who joined a company after the 16th of November, 1995. For such employees, there is a formula used for calculating monthly pension breakup. The formula is as follows:
EPS= (Service Period*Pensionable Salary)/70
Using this formula, a person can calculate the monthly pension breakup added to his/her EPS account.
Contribution In EPS Account
We know that both employee and employer contribute towards the EPF account. But, who contributes towards the EPS account? In the pension scheme, only the employer contributes towards the EPS account.
Both employee and employer give 12% of their monthly salary to the EPF account. But only 3.67% of the employer’s part is kept in the EPF account. The remaining 8.33% of the employer’s share is given to the EPS account. Besides that, the government also contributes 1.16% to the EPS account every month. So, the EPS account has a contribution from the government as well as the employer. In this account, the employee does not have to contribute anything.
How To Check Monthly Pension Payment?
If you want to check the monthly pension status, then you can easily do so by the following process. The EPFO has designed the online process not to face any kind of problem with the pension.
Time needed: 2 minutes
1. Visit the official website
Visit the website: https://mis.epfindia.gov.in/PensionPaymentEnquiry/paymentEnquiry.jsp.
2. Fill the details
You would see a new window where you have to fill in your details. The details include your office ID, PPO number, the city where your office had registered, and your date of birth. After filling out the details, enter the captcha code, and then click on “submit.”
3. Click submit and select the Pension Payment Enquiry
After clicking on the “submit” option, you would be taken to the pensioner’s portal. Here, you would find a drop-down menu on the left-hand side of the page. From this menu, select the “Pension Payment Enquiry” option.
4. Check the pension details.
After selecting the option, a page will appear on your screen with the pension details. Here, you can see the amount of contribution made by the employer every month.
Various Types Of EPS
There are various types of pension schemes available. The types of pension schemes depend on the situation of the member of the EPS act. Below are the various types of pension schemes that you can find to be the most common.
1. Widow Pension
As the name states, the widow pension is designed for the deceased EPS member’s spouse. Here, the widow/widower of a deceased employee is eligible for getting the pension. The widow/widower can only get the pension benefit until he/she gets married again. The widow/widower of the deceased employee has to provide a non-remarriage certificate. They have to provide this certificate every year. Only after giving this certificate they can avail the benefits of the pension. This certificate will serve as proof that the widow/widower is still eligible to get a pension.
In this type of pension, the amount is calculated based on Table C of the EPS scheme, 1995. The minimum amount of pension that a widow/widower can get from a widow pension is INR 1000.
2. Child Pension
As stated by the EPFO, if an employee dies and has a child, then the child is eligible for a pension. In the child pension, the deceased employee kid is eligible to get a monthly pension until the age of 25. The child pension does not interfere with the widow pension. Here, both the child and the widow receives the pension from the EPS account. While in widow pension, the widow/widower receives the pension until he/she dies or remarries; the same is not in child pension. In a child pension, the child gets a monthly pension only till the age of 25. Besides his, only 2 kids can get a monthly pension from the EPS. The amount of the child’s monthly pension is 25% of the widow pension.
3. Orphan Pension
As the name states, the orphan pension is for the deceased EPF member’s child. The child of the employee is an orphan if he/she has no parent or if the employee’s widow marries again. In this case, the child gets the pension titled under the orphan EPF pension scheme. Here, the child will get 75% of the widow pension per month. Here, the child gets the monthly orphan pension instead of the child pension.
4. Reduced Pension
As per the EPS Act, a member can withdraw from the pension account after 50. For doing so, the person should be less than 58 and must have contributed to the account for 10 years or more. Also, in this case, the annual rate of interest for pension is decreased to 4% until the member attains the age of 58.
These were the 4 different types of pension that a person can find in the EPS scheme. As stated above, each pension type is completely based on the type of situation at that time.