Employees’ Pension Scheme

The Employees' Pension Scheme, 1995, or EPS, provides income security to eligible employees and their families when regular employment income ends. Its core purpose is to convert part of the provident fund framework into a monthly pension for old age, permanent total disablement, and the death of the member.

Place within the provident fund framework

The Scheme was framed under Section 6A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and is administered by the Employees' Provident Fund Organisation. It complements provident fund savings by adding protection through recurring pension benefits.

How pension protection is financed

EPS operates through a pooled pension fund. A prescribed part of the employer's provident fund contribution is diverted to EPS, while the Central Government also contributes at the prescribed rate; the employee does not make a separate EPS contribution from the employee's share.

Contingencies covered

• A member with the required eligible service receives a monthly pension on attaining the pensionable age, with provision for reduced pension on earlier exit after the specified age.
• A member who becomes permanently and totally disabled during employment may receive a disablement pension, subject to the Scheme's conditions.
• On a member's death, eligible family members may receive widow or widower, children, or orphan pension, as applicable.
• Where service is insufficient for a monthly pension, the Scheme provides a withdrawal benefit or a scheme certificate according to its rules.