Employees Pension Scheme 1995: Most Important Topic for 2021 Competitive Exams

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  • Employees ‘Pension Scheme is a social security scheme run by the Employees’ Provident Fund Organisation (EPFO) for the employees of the organised sector.


  • Be a member of the Employees ‘Provident Fund Scheme (EPFS) , 1952 - Are a member of the ceased Family Pension Scheme 1971 or employed in Factories engaged in Industries specified in Schedule I of the Employees’ Provident Fund & Miscellaneous Provisions Act 1952 or employed in establishments notified & engaging 20 or more employees with a salary/wage less than ₹ 15,000 per month at the date of appointment.
  • Rendered eligible service of 10 years or more where contribution to EPFS has been made.
  • Pension to be received by the member on attaining 58 years of age. Provision of withdrawal benefit also exists.
  • A member, who is permanently & totally disabled during the employment is also eligible for pension.
  • The Family of the member is eligible to receive the pension following the date of death of the member.

Few Features of These Schemes Are-

  • A minimum pension of ₹ 1000/- per month to the member/disabled/widow/widower/parent/nominee pensioners & ₹ 250/- per month for children pensioners & ₹ 750/- per month to orphan pensioners.
  • Contribution to EPS: An employee contributes 12 % of his/her pay towards the EPF account. A matching contribution is also made by the employer. 8.33 % of the employee ′ s pay is remitted by the employer to EPS. The Central Government also contributes at the rate of 1.16 per cent of the pay of the members to the Employees ′ Pension Scheme.
  • To access the Employees՚ Pension Scheme 1995 document.
EPF Distribution
  • Employees who are members of EPF will automatically become the members of EPS.
  • Along with your employer contribution of 8.33 % of your salary, Central Govt. 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 ₹ 6,500 limits for an employer & central government contribution. However, in my view after the new rules, the limit should be raised to ₹ 15,000.
  • You will not get any interest on your EPS contribution.
  • For calculation purposes, if your 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.
  • For example, suppose you worked for 21 years and 7 months. In this case, your service is considered as 22 years. However, if your service is 21 years and 2 months, then service will be considered as 21 years only.
  • Pensioner receives a pension for life long & upon his death will go to spouse & two children below 25 years of age
  • Employees are eligible for EPS only if they complete 10 Years of service or attain the age of 58 or 50 years of age.
  • You will not be eligible to receive more than one pension from EPS.

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