Employees’ Pension Scheme Rs 2,000 crore released by Union government [ Current Affairs ]

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About Employees’ Pension Scheme: This scheme started in 1995. In this scheme, Employees who are members of EPF (Employee Provident Fund) will automatically become the members of EPS (Employee Pension Scheme).

  • Along with the employer contribution of 8.33 % of the salary, Central Government also contributes 1.16 % of employees’ monthly salary.
  • Here the meaning of salary means Basic + DA. The rulebook still sticks to the old salary limit of Rs. 6, 500 limits for an employer and central government contribution.
  • Employee will not get any interest on EPS contribution.
  • For calculation purposes, if the service is more than or equal to 6 months, then it will be rounded to next year.
  • If it is less than 6 months, then such fraction of service period is not considered for calculation.
  • Retiree receives a pension for life long and upon death this trend will go to spouse and two children below 25 years of age.
  • Employees are eligible for EPS only if they complete 10 Yrs. of service or attain the age of 58 or 50 Yrs. of age.
  • Employee will not be eligible to receive more than one pension from EPS.

Ab out the steps taken by government:

  • Government has released 2, 000 crore rupees to Employees’ Pension Scheme (EPS) as its contribution for the year 2015 - 16.
  • This contribution is in addition to the 250 crore rupees contributed by the government as grant - in - aid in the EPS in order to provide minimum pension of 1, 000 rupees to retirees under the scheme.
  • The contribution of government has been calculated at a rate of 1.16 per cent of the monthly wages of the members contributing to the scheme.
  • In September 2015, Government had assured EPS retirees a guaranteed minimum pension of Rs. 1, 000 per month.
  • Approx. 28 lakh retirees including five lakh widows will get benefit from this scheme. (There are total 44 lakh retirees).

- Published on: September 15, 2015