When an employee will be eligible for Pension?
The Employee Pension Scheme (EPS) was introduced in 1995 with the primary goal of assisting employees working in the organized sector. EPS is applicable to all employees who are eligible for the Employees Provident Fund (EPF) plan.
The Employees' Provident Fund Organisation (EPFO) governs the system, which assures that employees receive a pension after they reach the age of 58. The scheme's benefits are available to both existing and new EPF members. Both the employee and the employer contribute 12% of the employee's basic salary and Dearness Allowance (DA) to the EPF. While the employee's entire portion goes to EPF, the employer's contribution goes to EPS at a rate of 8.33 percent. After the employee retires, the plan provides a steady stream of income.
Eligibility to avail EPS Benefits:
The eligibility criteria to avail of EPS benefits are mentioned below:
• The employee must be an EPFO member.
• Employees must be 50 years old for an early pension and 58 years old for a regular pension.
• If you delay your pension for two years (until you reach the age of 60), you will be able to earn a 4 percent annual increase in your pension.
• You must have served for a minimum of ten years.
Year of service calculation:
If an employee has worked for 6 months or more, his/her service tenure is counted as 1 year. The working length will not be taken into account if the service period is less than 6 months. As a result, if an employee has worked for 10 years and 7 months, the number of years of service will be calculated as 11. However, if a person has worked for 10 years and 5 months, the number of years of service is 10.