EPS: Employees' Pension Scheme
EPS (Employees' Pension Scheme 1995) is the pension component of EPF, providing monthly pension to members after age 58 with at least 10 years of pensionable service.
Contribution: 8.33% of employer's 12% contribution is diverted to EPS, capped at ₹1,250/month (calculated on the wage ceiling of ₹15,000). The employee contributes nothing separately to EPS — the entire 12% employee contribution goes to EPF. Members earning above ₹15,000 historically had EPS contribution capped, though the 2022 Supreme Court ruling on 'higher pension' allows opt-in for actual basic pay-based contribution under specific eligibility.
Pension formula: Pensionable Salary × Pensionable Service / 70. Pensionable Salary is the average of last 60 months' wage (capped at ₹15,000 for standard EPS, or actual basic for higher-pension opt-ins). Pensionable Service is the number of years contributed. Maximum pensionable service is 35 years. Example: ₹15,000 × 25 years / 70 = ₹5,357 monthly pension.
Eligibility: minimum 10 years service for pension. Below 10 years, withdrawal benefit (lump sum) instead. Pension starts at age 58 (or reduced pension from 50 with proportional reduction). Family pension to spouse/children if member dies. Higher Pension Option deadline was July 11, 2023 (extended several times); members with continuous EPF service since pre-September 2014 could opt for actual basic-pay-based EPS contributions.
Richify Tip
Standard EPS pension is modest (typically ₹3,000-7,500/month even for full 35-year service at ₹15,000 ceiling) because the wage ceiling has been ₹15,000 since 2014. The Supreme Court 2022 ruling created two tracks: standard (₹15,000-capped) and higher pension (actual basic-capped). Higher pension means more EPS contributions but reduced EPF balance.
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