EPS Rules Changed: : The maximum monthly contribution of an employee in NPS is fixed at Rs 1250. One of the specialties of EPS is that its benefit is not limited to the employee only, but if the EPF member dies due to any reason, then his family i.e. spouse and children also get the benefit of pension in the form of ‘family pension’.
EPS Rules Changed: The Central Government has recently amended the Employee Pension Scheme, 1995. Under the new rules, now those employees will also get the benefit of withdrawal from EPS, who have contributed to it for less than 6 months, i.e. whose service period is less than 6 months. This amendment will benefit more than 7 lakh members of the Employees’ Pension Scheme every year, who leave the scheme after less than 6 months of contributory service.
Let us tell you that the Employee Pension Scheme, 1995 (EPS) was started so that the employees working in the organized sector in the private sector can also get monthly pension after retirement. Under the EPF Scheme, 1952, the contribution from the employee in the employee’s EPF i.e. Employee Provident Fund is 12 percent. At the same time, out of the 12 percent contribution made by the employer, 8.33 percent goes to EPS. Of the remaining part, 3.67 percent goes to EPF and 0.50 percent to EDLI. The employee can get monthly pension from EPS money on reaching the age of 58. There is also a contribution from the government in the employee’s pension account.
Remember that the maximum monthly contribution of an employee in EPS is fixed at Rs 1250. A special feature of EPS is that its benefit is not limited only to the employee, but if the EPF member dies due to any reason, then his family i.e. spouse and children also get the benefit of pension in the form of ‘family pension’.
What was the rule till now
Till now the withdrawal benefit was being calculated on the basis of the period of contributory service in full years and the salary on which the contribution of EPS has been paid. Therefore, members were eligible for such withdrawal benefit only after completing 6 months and above of contributory service. As a result, members who left the scheme before contributing for 6 months or more did not get any withdrawal benefit.
During the financial year 2023-24, about 7 lakh claims of withdrawal benefit were rejected due to less than 6 months of contributory service. After the new amendment, all those EPS members who have not reached the age of 58 years by June 14, 2024 will be eligible for withdrawal benefit.
This another change will benefit more than 23 lakh EPS members
The central government has also amended that each full month of service should be taken into account to give proportionate withdrawal benefit to EPS members. The amount of withdrawal benefit will now depend on the number of full months of service given by the member and the salary on which the EPS contribution was received. It is estimated that more than 23 lakh EPS members will benefit from this amendment every year.
Till now, partial period of service of less than 6 months after each full year was ignored in the calculation of withdrawal benefit. Due to this, in many cases, members got less amount of withdrawal benefit calculation. After the new amendment, contributory service will now be considered in completed months for calculation of withdrawal benefit. This will ensure proper payment of withdrawal benefit.
For example, an EPS member availing withdrawal benefit after 2 years and 5 months of contributory service and salary of Rs 15,000 per month was earlier entitled to a withdrawal benefit of Rs 29,850. Now he will get a withdrawal benefit of Rs 36,000.
