The Employee Pension Scheme (EPS) provides retirement benefits to organized sector employees in India.
To get a regular pension under EPS, you must:
Complete at least 10 years of continuous service
Reach the age of 58 years
If someone leaves their job before completing 10 years, they can either withdraw the accumulated pension or receive a reduced pension.
The minimum pension under EPS is currently ₹1,000 per month.
EPS is managed by the Employees’ Provident Fund Organization (EPFO) and is funded through a portion of the employer’s contribution to the EPF.
How EPS Contributions Work
Out of the employer’s 12% contribution to your EPF:
8.33% goes to the EPS
3.67% goes to your EPF account
While your EPF balance earns interest, the pension fund under EPS does not earn interest.
The government does not add interest to this fund.
The pension is calculated using a fixed formula:
Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Maximum pensionable salary: ₹15,000 per month
Example: If someone works for 35 years, they can get around ₹7,500 per month.
Will EPS Pension Increase?
There have been reports suggesting that the minimum EPS pension could be increased from ₹1,000 to ₹7,500 per month.
However, the government has clarified in Lok Sabha that no such plans exist yet.
Minister of State for Labor and Employment, Shobha Karandlaje, explained that increasing the pension without a new funding model could strain the fund’s stability.
While the government aims to provide maximum benefits, it wants to ensure long-term sustainability.
No timeline or concrete steps have been announced.
Summary:
EPS provides pension after 10 years of service and at age 58
Minimum pension is ₹1,000 per month
Contributions come from the employer’s share of EPF
EPS funds do not earn interest
No official plan yet to increase the minimum pension