EPS Pension Scheme: In today’s fast-paced life, financial security after retirement has become more important than ever. Especially for people working in the private sector, planning ahead is key. If you have a Provident Fund (PF) account, you may already know that it not only helps you save money but also gives you access to pension benefits under the EPS Pension Scheme.
Let’s understand what EPS is, how it works, and who is eligible for pension benefits according to EPFO (Employees’ Provident Fund Organisation).
What is the EPS Pension Scheme?
The Employees’ Pension Scheme (EPS) is a retirement benefit plan managed by EPFO. It was launched on November 19, 1995, to provide monthly pension to employees in the organized sector after retirement.
To be eligible for pension under this scheme:
- You must be an EPF member.
- You must complete at least 10 years of service.
- You can receive pension benefits after turning 58 years old.
- If your total service is less than 9 years and 6 months, you are not eligible for pension.
Main Benefits of EPS
- Regular Monthly Income: After retirement, EPS offers a fixed pension that provides financial stability.
- Pension Even After Job Change: If you change jobs but continue using the same UAN, your pension benefits remain safe — even if you work less than 10 years in a single company.
- Tax-Free Pension: The pension received under EPS is completely tax-free, which is a big plus.
How PF and EPS Contributions Work
Your PF and EPS accounts are linked. Each month, 12% of your basic salary + DA is contributed to your PF account.
- Out of the employer’s share, 8.33% goes to EPS.
- The remaining 3.67% goes to the EPF.
This combined contribution helps in building both your retirement fund and pension benefit over time.
How to Qualify for EPS Pension
To receive a pension under EPS, you must:
- Work for at least 10 years in total.
- Maintain the same UAN (Universal Account Number), even if you change jobs.
- Make sure all your PF contributions are properly linked to your UAN.
If you have worked in multiple organizations but your total service adds up to 10 years (under one UAN), you will be eligible for a pension, even with breaks in employment.
What is UAN and Why is it Important?
The Universal Account Number (UAN) is a 12-digit permanent number issued by EPFO. It remains unchanged throughout your career, no matter how many times you change jobs.
With UAN, you can:
- Easily manage your PF account.
- Track contributions from different employers.
- Ensure your pension and PF amounts are correctly linked.
Key Tips to Secure Your Pension
- Always use the same UAN when joining a new job.
- Keep track of your PF and EPS contributions regularly.
- Make sure your new employer updates your UAN correctly if you switch jobs.
Conclusion
The EPS Pension Scheme, combined with your PF contributions, offers a strong financial safety net after retirement. By completing 10 years of service and maintaining a single UAN, you can enjoy monthly tax-free pension benefits from EPFO.
For anyone working in the private sector, staying informed about EPS and managing your PF account wisely is the key to a secure and stress-free retirement.
