EPF pension scheme (Employee Pension Scheme) {कर्मचारी पेंशन योजना}

The Employee Pension Scheme was started in the year 1995 for the convenience of the employees who are working under different organizations as well as companies. The employees who come under the Employee Provident Fund Scheme can get benefits from the Employee Pension Scheme.

Details

Some changes were made in the EPS (Employee Pension Scheme) which got effective from 1 st September 2014. Under these changes, the employee pension fund in India will be distributed as 12% of the salary of the employees that is collected in the EPF account of the employee. The allocation of this 12% is into 3.67%, 8.33% for EPS, and 1.1% as admin charge for EPF, 0.5% for EDLI as well as 0.1% as EDLI admin charges. The minimum amount of the pension under the employee pension scheme is Rs.1000. the employees who earn less than 15,000 per month are mandatory to have an EPF account. The coverage for the employees’ under Employee deposit linked insurance scheme (EDLI) has been augmented from Rs. 1.56 lakhs –Rs.3 Lakhs.

  • If an employee is already a member of the EPF scheme, then he or she will be directly enrolled for the EPS scheme.
  • The central government also contributed to this scheme, along with 8.33% of the salary of the employees’ participation.
  • The central government contributes 1.16 per cent of the employee’s salary.
  • The employees made EPS contribution gets no interest.
  • The available service is computed in the case of 6 months intervals.
  • If the employee has more than 6 months of service, then it will be calculated in the next year, and if the employee has less than 6 months of service, then it will be calculated in the previous year.
  • The person can get the pension lifelong, and in case of the employee’s death, the pension will pass on children as well as the spouse.
  • To get the pension under this scheme, the person must complete 10 years of service.
  • If a person wants to get pension early then, the age is required 50 years and 58 years for a regular

Work of Employee Pension Scheme 

The scheme is available only for the employees, so only the employers can contribute towards EPS. And the employees are not able to provide directly to this scheme. The employer’s contribution of 8.33% goes to the employee pension scheme, and the remaining 3.67% goes to EPF. So we can say the 8.33% of the amount from employee’s salary is contributed towards EPS and 15.67% is contributed towards EPF.

Features

There are some main features of this scheme that are mentioned below:

  • The person must have an EPF account to get enrolled under this scheme.
  • Only employees can contribute to this scheme.
  • The person can withdraw the amount from the EPS depending on the time of service and age.
  • The person is also able to carry forward EPS to the next job.
  • If a person changes the position, then only the employee pension fund is transferred to the new employer, and the EPS will be not moved.
  • When the employee changes his or her job, the contribution that he has made towards EPS will be kept with the Employees’ Provident Fund Organization (EPFO)

Benefits

EPF scheme is known as one of the largest and most significant saving schemes that are available for Indian employees. The key benefits of this scheme are mentioned below:

Tax-Free Savings

The interest rate provided on the number of EPS which is pre-decided by the organization. The Indian government will take no tax on both the amount of interest received on the deposits as well as the actual deposited amount. The person can withdraw the amount after the completion of the maturity period or 5 years of having availed the scheme. The scheme is 100% tax exempted. If a person wants to withdraw the amount before completion of a maturity period of 5 years, then he has to pay tax on it. This feature is the best to provide a unique benefit to employees in the form of income to his funds in the form of interest.

Long-Term Financial Security

The person can withdraw the amount very quickly under this scheme. This scheme also helps in ensuring savings.

Retirement Period

The employees can use the collected amount under this scheme at the time of retirement. This scheme also provides relief to the retired employee in the form of financial security.

Unforeseen circumstances

The employees can use the collected amount under this scheme in the case of an emergency. The person is also able to withdraw the amount prematurely. There are conditions and circumstances in which the programme provides pre-term withdrawals.

Unemployment or Income Loss

If any employee loses his or her job due to any reason, then the amount under this scheme is used for his expenses.

Resignation or Quitting of Job

If a person is quitting the job or giving Resignation, then he or she can withdraw 75% of the EPF fund after one month of the date when he or she left the job, and the remaining 25% can be withdrawn after 2 months of the unemployment.

Death

In the case of the death of the employees, the entire amount will be given to the nominee to help the family in difficult situations. The amount will be provided with the interest of the nominee under this scheme.

Disability of the employee

If the employee is not in the condition to go office or work, then these funds can be used to help him or get over a hard time.

Lay-off

In the condition, if the company lay-off, then the funds of this scheme can be used by the person until he or she gets the new job according to his choice.

Long run savings

This scheme is the best scheme to save money for your better future.

Liquidity of funds

When an employee is in a difficult situation and facing financial problems, then this scheme is the best source of income at that time. The amount of this scheme can be used by the employees to meet unavoidable expenses that are medication needs as well as educational needs.

Eligibility Criteria for Employee Pension Scheme

The employees need to fulfil the eligibility criteria of the scheme to get benefits of this scheme. The details about the eligibility criteria for this scheme to avail benefits are given below:

  • To get the benefits o this scheme, an individual must be an active member of the scheme.
  • Employees who are already working in the organization can directly avail of the benefits of this scheme.
  • The organization that has at least 20 working members then is liable to give EPF benefits to the workers.
  • The benefits of this scheme cannot be taken by those employees who live in Jammu and Kashmir.

The Registration Process

The person has to follow the simple process to get enrolled under this scheme. All the steps for registration under this scheme are mentioned below:

1. At first, the employees have to visit the official website of Employee Provident Fund Organization (EPFO).

2. After visiting the official website, you have to go to the Establishment Registration section and then click on it.

3. After this, a new page with ‘Instruction Manual’ will open on your screen.

4. Here you will get all the details about the Employer Registration that is followed by registration of DSC (Digital Signature Certificate) of the employer that is a requirement for new application submission.

5. After this click on accept (I have read the instruction manual) tick box to proceed as well as to fill the details to get register.

6. After this, an email will be sent on your email ID for activation as well as mobile PIN will be also sent on your registered mobile number.

7. Now you have to upload the required documents to complete the registration process.

8. If you are already registered, then you can log in using your Universal Account Number (UAN).

The Login Process

To login on the Employee Pension Scheme portal, the process is mentioned below:

1. At first, you have to visit the member website of EPF that is EPF e-SEWA/EPF Members Portal

2. After this, you will see an option of log in using UAN on the right side. 

3. Now you have to enter UAN and get the login.  

KYC Updation in EPF

1. To update the KYC, you have to Visit the EPF Members Portal.

2. After visiting the portal click on the login option and enter UAN as well as Password.

3. After this a new page will open on your screen now click on the section of ‘Manage’ and by dropdown menu click on KYC from.

4. Now update the details like your name and number of PAN, Aadhaar, Bank documents, etc.

5. After updating the complete information, click on the Save button.

6. After this, it will show as Pending KYC until it is verified from the other end.

Frequently Asked Questions

Q: If someone has withdrawn a part of EPF funds, then will he continue getting interest on the withdrawn amount?

No, there is no interest will be provided on the withdrawn amount. The remaining in the EPF account will carry on earning interest.

Q: How is UAN assigned?

When you join a company that has more than 20 employees, you can entitle to EPF benefits. After this EPFO will allot a unique 12-digit permanent number known that is also known as Universal Account Number (UAN) to the member. The PF accounts of a member will be linked with his UAN. 

Q: Will someone has to activate UAN for transferring EPF online?

Yes, you have to activate UAN by registering it at the EPF member portal before you can process claims as well as withdraw funds online. To do this, you just have to visit the EPF member portal.

Q: If someone changed the job, he or she would get a new UAN?

No, the UAN allotted to a member at once will be used throughout the service period. A new Pf account can be opened by only the new member and then it will be linked to the UAN of the member.