EPFO Pension New Rule: The Employees’ Provident Fund Organization has issued some good news regarding its pension scheme EPS-95. In this new provision, the requirement has been laid down that the employee must have served for a minimum of 10 years in order to obtain the benefits of pension. This rule factors into the lives of many lakhs of private sector employees who are making a future plan of financial security after retirement. It is a monthly pension that comes after retirement under the EPS-95 scheme, which mainly aims to provide a steady income to the employees in days to come.
The Nature And Working of EPS-95 Scheme
EPS-95 i.e., Employee Pension Scheme, was introduced by EPFO on 19 November 1995. This scheme is meant mainly for private sector employees so that some monthly pension can be given to them after their retirement. Both the employee and employer contribute to the scheme. A certain part of the basic salary plus dearness allowance of an employee is contributed every month towards the pension fund, and pension is eventually drawn after retirement.
Number of Years of Service Required For Pension
After the new rules of the EPFO, the employee will now have to work for a minimum of 10 years in order to receive the benefits of this pension scheme. It does not matter whether the work was held in the same company or in some other company; the only condition is that the Universal Account Number i.e., UAN, must be the same. If one is in service for 9 years and 6 months, then the service time shall be considered to be 10 years, thus becoming eligible for pension.
What Will Be The Effect on Pension If There is a Break In The Job
Having changed companies during employment and taken a break for quite some time in between does not mean that one must panic. Keeping one’s UAN number the same and service years above 10 shall ensure that an employee shall be eligible for pension benefits despite having a gap. The service period is counted on combination basis by the EPFO, keeping the employee’s eligibility intact.
How Much Money Gets Deducted In The EPF And EPS?
As and when you are paid the salary, the amount of 12 percent goes into the PF account. The whole of 12 percent of the employee contribution goes into the EPF account, whereas 8.33 percent of the 12 percent given by the employer goes into the pension scheme or EPS, and the remaining 3.67 percent goes into the EPF account. Hence, this scheme benefits in providing the dual advantage of saving and pension.
What Are The Types of Pensions Under EPS-95?
The EPS-95 scheme provides for pensions after retirement and some special situations. Widow pension is given to the wife in case of the death of the employee. If she is not there, then child pension is given to the children. Orphan pension is given to the children if both parents die. Disability pension is awarded to the employee if he gets disabled due to any reason, even if the complete period of service has not been completed by him.
What Is The Age And Options For Getting Pension
On average, under the EPS scheme, pension starts after completion of 58 years. In cases of acquisition of pension on completion of 60 years, the subscriber shall get N% increase in pension, where N is 4% for every year of delay from age 58 years. If a pensioner wants a pension before attaining 50 years of age, he will be granted a lesser amount. Hence, it becomes very necessary to understand the scheme in full detail while entering into it for pensions.
How to Apply For a Pension
To enjoy the benefits of the EPFO pension scheme, one can apply both online and offline. For online application, one has to login to the official website of EPFO and fill in the form. Alternatively, one could go through his employer to apply. Apart from these, one has to submit documents like Aadhar Card, PAN Card, bank account details, passport size photograph, and appointment letter.
Importance of The UAN Number in The Pension
The UAN or Universal Account Number is a 12-digit number which acts as a permanent number linking all the PF accounts of an individual. With changes in jobs, the PF account changes, but the UAN number never changes. This keeps all your service records at one place and hence it becomes easier to decide pension eligibility. If the UAN number is not the same or there is incorrect info, then there might be a problem in the pension.
Also Read: Senior Citizen Pension Scheme 2025: Get RS 3,000 Monthly With Simple Application