For salaried employees in India, retirement planning is not just about savings but also about steady income after leaving service. One such government-backed pension system is the EPS 95 Pension Scheme, which works alongside the Provident Fund system. It ensures monthly pension support to employees working in the organised sector once they reach retirement age.
Below is a complete, easy-to-understand explanation of EPS 95, covering eligibility rules, pension calculation formula, benefits, and important updates.
⭐ What is EPS 95 Pension Scheme?
EPS 95, also known as the Employees’ Pension Scheme 1995, is a social security pension programme launched on 19 November 1995. The scheme is managed by the Employees’ Provident Fund Organisation, which looks after pension benefits for employees covered under EPF.
The scheme provides a monthly pension to employees once they turn 58 years of age. It applies to both existing and new EPF members working in the organised sector.
Under EPS, contributions are made jointly by the employer and the government, while the employee’s full share goes to the Provident Fund.
⭐ How Contributions Work Under EPS 95
Every month, both employee and employer contribute 12% of basic salary plus dearness allowance (DA).
Here’s how the employer’s share is divided:
- 8.33% → Employees’ Pension Scheme (EPS)
- 3.67% → Employees’ Provident Fund (EPF)
The employee’s entire 12% contribution goes only to EPF.
⭐ Minimum Pension Under EPS 95
To protect pensioners with lower contributions, the Government of India has fixed a minimum pension amount under EPS.
- Minimum monthly pension ranges between ₹1,000 and ₹2,000
- This provision came into effect from 1 September 2014
- Government also provides additional budgetary support to strengthen pension payouts
Apart from employer contribution, the government contributes 1.16% of wages, capped at ₹15,000 per month, towards EPS.
⭐ Latest Updates on EPS 95 Pension
As per updates from the Ministry of Labour & Employment:
- Employees opting for higher pension are not required to pay extra 1.16% from their salary
- This amount is adjusted from the employer’s 12% share
- The decision follows directions of the Supreme Court
- Pension calculation is now based on average basic salary of the last 60 months
- Longer service results in a higher pension amount
⭐ Eligibility Criteria for EPS 95 Pension
To receive pension benefits under EPS 95, the following conditions must be met:
- Must be a registered member of EPFO
- Minimum 10 years of service required
- Normal pension age is 58 years
- Early pension allowed at a reduced rate after 50 years
- Deferred pension up to 60 years gives 4% extra pension per year
Special Eligibility Cases
- Members with more than 6 months but less than 10 years of service can withdraw EPS amount if unemployed for over 2 months
- Permanently disabled employees are eligible for monthly pension regardless of service length (medical certification required)
- Family members are eligible for pension if the employee dies during service
⭐ Important Rules Under EPS 95
- Employees earning ₹15,000 or less per month must be enrolled
- Employer contributions must be deposited within 15 days of month-end
- If widow/widower remarries, children receive pension
- Pensionable salary includes:
- Basic pay
- Dearness allowance
- Retaining allowance
- Food concession value (if applicable)
Forms Related to EPS
- Form 10C: Withdrawal before 10 years of service
- Form 10D: Monthly pension claim
- Form 11 & 13: Job change and PF transfer
- EPS balance can be checked via EPF passbook
⭐ EPS 95 Pension Calculation Formula
Monthly pension is calculated using this formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Pensionable Salary
- Average monthly basic salary of the last 60 months before exit
Pensionable Service
- Total years of EPS contribution
- Service of 6 months or more is rounded up to one year
- Less than 6 months is ignored
- Employees completing over 20 years of service get 2 additional years added
⭐ Benefits of EPS 95 Pension Scheme
Pension After Retirement
- Monthly pension starts from age 58
- Pension certificate issued after retirement
Disability Pension
- Available for permanent and total disability
- Pension starts from the date of disability
- Applicable even without completing minimum service
Family Pension
Family members receive pension in these cases:
- Death before retirement after completing 10 years of service
- Death after pension has started
- Death during service with at least one EPS contribution
Withdrawal Option
- Members unable to complete 10 years can withdraw EPS amount at 58
- No monthly pension in withdrawal cases
Conclusion
The EPS 95 Pension Scheme plays a vital role in providing financial security to salaried employees after retirement. With guaranteed pension, government backing, and family protection benefits, it remains a strong pillar of India’s social security system. Understanding the calculation method and eligibility rules helps employees plan their future better. For more simplified explanations of pension schemes, EPF rules, and government benefits, visit Sarkari Bakery.