EPS Pension Eligibility: Can You Receive Pension While Still Employed? EPFO Rules Explained
The Employees' Pension Scheme (EPS) is a retirement scheme managed by the Employees' Provident Fund Organisation (EPFO), designed to provide social security to employees in the organized sector upon retirement at the age of 58. Introduced in 1995, the EPS ensures that every employee in the organized sector with an EPF account can benefit from it. But what happens if someone continues to work beyond the age of 58? Can they still claim their EPS pension while employed? Let's find out the rules and provisions.
Can You Receive EPS Pension While Still Working?
One unique feature of the EPS scheme is that if an employee continues to work after the age of 58, they are still eligible to receive their EPS pension. This means you can claim your pension even while continuing with your job.
How the Contributions Work
Under the EPS scheme, both the employee and the employer contribute to the fund:
This scheme applies to all employees covered under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
10-Year Service Rule for EPS Pension Eligibility
To qualify for the EPS Pension Scheme benefits, you must be an EPFO subscriber and have worked for at least 10 years. According to EPFO rules , any employee who has contributed to the EPF for over 10 years and is above the age of 50 is eligible for a pension under EPS 95. However, if your total employment period is less than 10 years, you can withdraw the pension fund but won't be eligible for monthly pension payments.
Can You Claim EPS Pension Before 50?
No, if you are younger than 50 years, even if you have completed 10 years of service, you cannot claim your EPS pension. You can only access the funds deposited in your EPF account after leaving your job.
Reduced Pension for Early Withdrawal (Before 58 Years)
If you have worked for at least 10 years and are between the ages of 50 and 58, you can claim your pension, but the amount will be reduced. For every year that you claim pension before 58, there is a 4% reduction. For example, if you start receiving your pension at age 55, you will receive only 88% of the total pension (100% – 4% for 3 years).
Disability Pension Under EPS 95
The EPS 95 scheme also includes a provision for disability pension. If a member becomes permanently disabled while still employed, they are eligible for a disability pension, regardless of whether they meet the 10-year service requirement. Even if an employee has contributed to EPS for only two years, they are entitled to disability pension.
In conclusion, the Employees' Pension Scheme (EPS) offers several options for salaried individuals to receive pensions, including provisions for early retirement and disability, ensuring financial security even in challenging times.
Can You Receive EPS Pension While Still Working?
One unique feature of the EPS scheme is that if an employee continues to work after the age of 58, they are still eligible to receive their EPS pension. This means you can claim your pension even while continuing with your job.
How the Contributions Work
Under the EPS scheme, both the employee and the employer contribute to the fund:
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- The employee's contribution: 12% of their basic salary is deposited into the Employee Provident Fund (EPF).
- The employer's contribution: 12% of the employee’s salary is split—8.33% goes into the EPS fund and 3.67% into the EPF account.
This scheme applies to all employees covered under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
10-Year Service Rule for EPS Pension Eligibility
To qualify for the EPS Pension Scheme benefits, you must be an EPFO subscriber and have worked for at least 10 years. According to EPFO rules , any employee who has contributed to the EPF for over 10 years and is above the age of 50 is eligible for a pension under EPS 95. However, if your total employment period is less than 10 years, you can withdraw the pension fund but won't be eligible for monthly pension payments.
Can You Claim EPS Pension Before 50?
No, if you are younger than 50 years, even if you have completed 10 years of service, you cannot claim your EPS pension. You can only access the funds deposited in your EPF account after leaving your job.
Reduced Pension for Early Withdrawal (Before 58 Years)
If you have worked for at least 10 years and are between the ages of 50 and 58, you can claim your pension, but the amount will be reduced. For every year that you claim pension before 58, there is a 4% reduction. For example, if you start receiving your pension at age 55, you will receive only 88% of the total pension (100% – 4% for 3 years).
Disability Pension Under EPS 95
The EPS 95 scheme also includes a provision for disability pension. If a member becomes permanently disabled while still employed, they are eligible for a disability pension, regardless of whether they meet the 10-year service requirement. Even if an employee has contributed to EPS for only two years, they are entitled to disability pension.
In conclusion, the Employees' Pension Scheme (EPS) offers several options for salaried individuals to receive pensions, including provisions for early retirement and disability, ensuring financial security even in challenging times.
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