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Employee Pension Scheme

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Employee Pension Scheme

The purpose of the scheme is to provide for

superannuating pension, retiring pension or permanent total disablement pension to the

employees.

Widow or widowers pension, children pension or orphan pension payable to the

beneficiaries employees.

Salient Features of the Employees Pension Scheme 1995 (EPS-95).

This scheme is applicable to all members who are covered under Provident Fund Act after15.11.1995

It replaces the previous Employees Family Scheme 1971

If member is alive, pension to member

If member is not alive, Pension to spouse and two children below 25 years of age

Applicable to all PF subscribers including exempted establishments contributing to EPS

Scheme.

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Funding of the Pension Scheme

An amount equal to 8.33% of pay or Rs 541/- ( whichever is lesser) is pooled into the EPS from the

Employer's contribution.

Example:- If a PF member gets Rs. 1000/- as monthly wages and he and his employer contributes

12% each (Total of Rs. 240)

Rs. 120 + Rs.37 =157 goes to Provident Fund and Rs. 83 goes to Pension Fund.

The Central Government will also contribute at 1.16 % of the pay of the member.

Pay" means basic wages, with dearness allowance, retaining allowance and cash value of food concessions

admissible, if any

Eligibility to under EPS scheme

Minimum 10 years eligible service will entitle for member pension. The aggregate of actual

service and the 'past service' shall be treated as eligible service. The fraction of service for sixmonths or more shall be treated as one year and the service less than six months shall be ignored.

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Types of Monthly Pension

Member Pension:- On superannuation / Retirement/ Short service.

Disablement Pension:- On permanent and total disablement during employment Widow Pension:- After death in service or death after retirement of the member from the

company. (50% of monthly members pension subject to a minimum of Rs. 250/- PM)

Children Pension:- After death in service or death after retirement of the member from the

company, children pension is given two children (25% of the widow pension subject to a minimum

of Rs. 115/- PM) in addition to widow pension. If there is no widow pension, children are

entitled for orphan pension ( 75% of widow pension subject to a minimum of Rs. 170/-PM)

Return of Capital :- Reduced pension and avail of return of capital under any three

alternatives given in the page ( slide number 10) .

Nominee Pension:- upon death of the members having no family, pension will paid to the

nominee (Equal to that of widow pension )

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Superannuation Pension

If age is 58 years or more

20 years or more service

Retirement Pensions

If age is between 50 and 58 years

20 years or more service

Short Service Pension

10 to 20 years of service

Disability Pension

Permanently and totally unfit for the employment which the member

was doing at the time of such disablement .

Membership with one months contribution to the pension fund is

enough.

Quantum of pension as per pension formula subject to minimum Rs.

250/- PM

Monthly member Pension Eligibility

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If the member completes 20 years, the Monthly Member PensionPensionable Salary X Pensionable Service

70

If the member completes less than 20 years, the monthly member pension The amount arrived as per the

above formula, shall be reduced at the rate of 6% for every year by which the eligible service falls short of

20 years, subject to a maximum reduction of 25%

The member can continue in service while receiving this pension On attaining 58

Years of age, a EPF member cease to be a member of EPS automatically

The member need not be in service if he completes 10 years service in FPS

Monthly member Pension Calculation

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Situation I -

Death of the member/ Death while in service :-(Widow Pension & Children

Pension/ Orphan Pension/ Nominee Pension)

Member should complete at least one month's service

If unmarried, pension to nominee or to dependent parent is payable without any

other conditions .

In this case children pension / orphan pension is payable to maximum of 2 children

upto 25 years. ( In case more than two children the eligibility of pension will run

from the eldest to the younger child in order).

Family Pension - Eligibility

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Situation II

Death of the member Death when NOT in service:-(Widow Pension &Children Pension /

Orphan Pension/ Nominee Pension)

If a member dies even when not in service, holding a valid scheme certificate and not completed

58 years of age.

If unmarried, pension to nominee or to dependent parent is payable only when the member hasrendered 10 years of service

Situation III

Death of the employee While getting Pension from FPS :-(Widow Pension &Children Pension /

Orphan Pension/ Nominee Pension)

Widow Pension - 50% of the monthly member pension subject to minimum Rs. 250 /- PM

Children Pension - 25% of the monthly member pension to each children (maximum number 2)

upto attaining 25 years of age.

Nominee Pension - Equal that of widow pension.

Family Pension - Eligibility

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Options for Return of Capital

Alternative 1

Revised pension during life time of member with return of capital on his death.

Alternative 2

Revised pension during life time of member, further reduced pension during life time of

the widow or her remarriage whichever is earlier and return of capital on widows

death / remarriage

Alternative 3

Pension for a fixed period of 20 years not with standing whether the member lives for

that period or not

The employee is eligible to pension may opt to draw for reduced pension

and avail of return of capital under any one of the three alternatives givenbelow.

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Example of Calculation

Date of Birth : 31.1.1947

Completed 58 Years on :- 31.1.2005Age as on 16.11.95 :- 48 years

FPF Membership :- 18 Years ( assumed membership of FPF w.e.f 1977)

EPS 95 Membership :-10 Years

Pay as on 16.11.95 :- above Rs 2500/-

Past service benefit :- Rs. 135 X 5.301 = Rs.715.635(Factor formula of table & schedule B of the previous EFPS - 1971)

Pension payable : =Rs. 715.635 + ( Rs.6500 X10/70)

= Rs. 715.635+ Rs.928.57

= Rs.1644.205

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Example of Calculation

Date of Birth :- 11.7.1951

Completed 58 Years on :- 10.7.2009

Age as on 16.11.95 :- 34years

FPF Membership :- 15 Years ( assumed membership of FPF w.e.f 1980)

EPS 95 Membership :- 13 Years

Pay as on 16.11.95 :- above Rs 2500/-

Past service benefit :- Rs. 105 X 3.292 = Rs.345.66(Factor formula of table & schedule B of the previous EFPS - 1971)

Pension payable =Rs. 345.66 + ( Rs.6500 X13/70)

= Rs. 345.66+ Rs.1207.14

= Rs.1552.80

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Schedule B of the previous EFPS - 1971

(n) FACTOR (n) FACTOR

(1) (2) (1) (2)

Less than 1 1.049 Less than 13 3.292



Less than 4 1.396 Less than 16 4.381Less than 5 1.536 Less than 17 4.819








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