Shamini 
(C): CA Nitin Kaushik – twitter
The Employees’ Pension Scheme (EPS) provides an important safety net for millions of Indian workers in the organised sector. For those workers, EPS equips them with some amount of financial security at the time of retirement. Understanding how the EPS functions, especially how one becomes eligible for it and how the pension is calculated, is a critical foundation for maximizing access to this government benefit for retirement. The EPS commenced operation in 1995 and offers pension benefits depending on the employee’s salary and period of service.
Minimum Requirements For Eligibility
1. Minimum service time: 10 Years
2. Minimum Age to Start Receiving Pension: 58 Years
3.The employee must be properly registered with EPFO and must have sustained and regular contributions in EPS over the period of their employment.
4. Of the total EPF contribution made by the employer, 8.33% is reserved for the employee’s EPS pension fund.
Once you have served the minimum 10 years, you will be eligible to receive EPS pension as long as you reach the pensionable age of 58 years. The government has set a minimum monthly pension of Rs1,000 since 2014, but there’s a demand to raise monthly pensions to Rs7,500.
Maximize Your EPS Pension
1. Work more than 10 years
2. Maintain higher salary used in calculation of pension
3. Continue uninterrupted contributions to EPFO
4. In most cases, opt for Higher Pension Scheme if eligible
How to Check EPS Pension
Members can check their pension on the official EPFO Portal.
How is the EPS Pension Calculated?
Monthly Pension = Pensionable Salary × Pensionable Service / 70
Pensionable Salary = the average of last 60 months’ salary (capped at Rs 15,000)
Pensionable Service = the years of service (minimum 10 years)
For example, where pensionable salary is Rs 12,000 and pensionable service is 10 years:
Monthly Pension = 12,000×10 / 70 = Rs 1,714
EPS will provide monthly pension benefits for the member’s lifetime, family protection, disability protection and provided tax exemptions, EPS is an important retirement solution for so many people.
With this knowledge in mind, employees can plan their retirement accordingly and ensure income earned from pension payouts is secure.
