EPS (Employee Pension Scheme)

Employee Pension Scheme (EPS), launched on 16th November 1995, is a social security initiative by the Government of India under the EPF & MP Act, 1952.
OPEN FD
Employee Pension Scheme
OPEN FD
4 mins
26-May-2025

What is Employee Pension Scheme?

The Employees’ Pension Scheme (EPS) 1995 was launched by the Employees’ Provident Fund Organisation (EPFO) on 19th November 1995.

It helps employees receive a monthly pension after they retire. Once a member turns 58, they can claim their pension through the EPFO.

Both new and existing EPF members can benefit from EPS 95. Both the employee and employer contribute 12% of the employee's basic salary and dearness allowance (DA) to the scheme.

The entire employee contribution goes to the EPF, while 8.33% of the employer's contribution is allocated to EPS, and the remaining 3.67% goes to the EPF.

While EPS ensures a steady pension post-retirement, you can further strengthen your financial future with a high-interest, risk-free investment option. Diversify your retirement savings and earn up to 7.95% p.a. returns with a Fixed Deposit. Book your FD now and enjoy assured returns!

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Special tenure of 18, 22 and 33 months offered for higher returns
  5. Up to 0.55% p.a. extra interest offered for senior citizens
  6. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

Responsibilities of employers

Employers have several key responsibilities regarding pension contributions under the Employees' Provident Fund (EPF) scheme:

  • Monthly contribution: Employers must contribute 8.33% of an employee's basic salary and dearness allowance to the Employees' Pension Fund within 15 days of the end of each month.
  • Government contribution: The Central Government also contributes 1.16% of an employee's pay to the Employees' Pension Fund.
  • Contractor employees: Employers are responsible for making contributions for all employees, including those working under contractors.
  • Disability benefits: If an employee becomes totally or permanently disabled during their service, the employer must contribute at least one month's basic EPS contribution to ensure eligibility for pension benefits.
  • Administrative costs: Employers are responsible for bearing all administrative costs associated with the EPF scheme.

Benefits of Employee Pension Scheme

  • Superannuation Pension: Provided to members who retire at age 58 with a minimum of 10 years of eligible service. The pension is calculated using the formula: (Pensionable Salary × Pensionable Service) / 70.

  • Early Pension: Available to members retiring between ages 50 and 58 with at least 10 years of service. The pension amount is reduced by 4% for each year below 58.

  • Monthly Pension: Determined by the formula: (Pensionable Salary × Pensionable Service) / 70.

  • Minimum Pension: A guaranteed minimum of Rs. 1,000 per month, subject to deductions in cases of commutation or early retirement.

  • Widow Pension: The widow is entitled to receive 50% of the member's pension or Rs. 450 per month, whichever is higher.

  • Children Pension: Each eligible child receives 25% of the widow’s pension, up to a maximum of two children.

  • Orphan Pension: In the absence of a surviving spouse, each orphan can receive 75% of the widow’s pension, for up to two children.

  • Permanent Disability Pension: A minimum monthly pension of Rs. 250 is paid to members who suffer total and permanent disability during their service.

  • Withdrawal Benefit: Applicable to members who exit the scheme before completing 10 years of service. The benefit amount is determined as per the provisions of Table D.

However, to ensure a comfortable and financially secure retirement, it is advisable to supplement your pension with additional investments. Boost your retirement corpus with a high-interest FD. Get up to 7.95% p.a. with Bajaj Finance FD – Book your FD today and enjoy a stable financial future!

Pro tip

Bajaj Finance offers attractive Fixed Deposit interest rates of up to 7.40% p.a. for non-senior citizens, and up to 7.95% p.a. for senior citizens, inclusive of an additional rate benefit of up to 0.55% p.a.

systematic-deposit-plan-pro-tip-banner

How to calculate your pension under EPS

The pension amount depends on member’s pensionable salary and service duration. Here is the formula for calculating monthly pension income:

Member’s Monthly Pension = (Pensionable salary x Pensionable service)/70

1. Pensionable salary

Pensionable salary is the average monthly salary earned during the last 60 months before a member exits the Employees’ Pension Scheme (EPS).

If there are any non-contributory periods (when no EPS contributions were made) during these 60 months, those days are excluded from the calculation. However, the benefits are still calculated as if the full salary was earned for the entire month.

For example: If someone joins a job on the 3rd of a month and earns Rs. 15,000 per month, their actual salary for 28 working days might be Rs. 14,000. But for EPS purposes, the full Rs. 15,000 would be considered as the pensionable salary for that month.

The maximum pensionable salary is capped at Rs. 15,000 per month.

Given that the employer contributes 8.33% of this salary to the employee’s EPS account, the monthly deposit in the employee’s EPS account is:

Rs. 15000 x 8.33/100 = Rs. 1250

2. Pensionable Service

The pensionable service is referred to actual period of service for the member. Service periods across different employers are considered when calculating the pensionable service period. The employee must obtain the EPS Scheme certificate and submit it to the new employer whenever they switch jobs.

If a member withdraws the EPS amount before completing 10 years and joins another company, they must restart contributing to the EPS account, and the service period will be reset to zero.

The pensionable service period is assessed on a 6-month basis, with a minimum of 6 months. For instance, if the service period is 7 years and 3 months, the considered pensionable service is 7 years. However, if the service duration is 7 years and 11 months, the pensionable service period is considered as 8 years.

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
Recommended

FD - Special Tenure -18 Months

INTEREST RATES UP TO
7.95% p.a.
Invest Online

FD - Special Tenure - 22 Months

INTEREST RATES UP TO
7.85% p.a.
Invest Online

FD - Special Tenure - 33 Months

INTEREST RATES UP TO
7.75% p.a.
Open FD

FD - Age below 60

INTEREST RATES UP TO
7.40% p.a.
Open FD

FD - Senior Citizen

INTEREST RATES UP TO
7.95% p.a.
Open FD

FD – Minor

INTEREST RATES UP TO
7.40% p.a.
Open FD

Eligibility criteria applicable for EPS

  1. Individual must be an EPFO member.
  2. To get early pension, you should be at least 50 years old, and for regular pension, you need to be 58 years old.
  3. You must complete at least 10 years of service to avail benefits of Employee Pension Scheme.

Additional read: Difference Between EPF and EPS

Documents Required

  • Proof of Identity – such as Aadhaar card, Passport, or Voter ID

  • Bank Details – including a cancelled cheque or a copy of the passbook

  • Date of Birth Verification – via a birth certificate or school leaving certificate

  • Death Certificate – required in case of claims for family pension

  • Proof of Relationship – necessary for family pension eligibility

  • Disability Certificate – issued by an EPFO-authorised medical practitioner, for disablement pension claims

  • Employment/Service Records – like the EPF passbook or official employment documents

Types of pensions in the Employees’ Pension Scheme

The EPS 95 pension scheme offers various pensions, including those for widows, children, and orphans, providing support to the deceased member's family.

1. Child pension

Surviving children receive a child pension, in addition to the monthly widow pension, until they turn 25. The amount is 25% of the widow pension, and a maximum of two children can receive this benefit.

2. Widow pension

Widows are eligible for a pension under the Widow or Vridha pension, which continues until their death or remarriage. If there are more than one widow, the pension is payable to the eldest widow.

3. Reduced pension

If an EPFO member completes 10 years of service and is between 50 and 58 years old, they can opt for early pension. However, If the member is below 58 years of age, the pension amount is reduced by 4% for every year.

4. Orphan pension

If the member passes away without a surviving widow, the member's children can receive a monthly orphan pension, which is 75% of the monthly widow pension value. Up to 2 children can benefit from the orphan pension.

Explore Life Insurance policies

Beyond traditional investment options, life insurance policies offer a unique combination of savings, investment, and life cover. As awareness grows, more individuals are turning to these policies. Bajaj Finance Insurance Mall brings you life insurance plans with coverage up to Rs. 1 crore, offered by top insurance providers. This all-in-one platform simplifies the process of comparing and purchasing the right policy online. Secure your financial well-being and that of your loved ones with budget-friendly premiums. Explore the plans below.

Types of pensions forms under EPS in India

Form/Certificate

Purpose

Form 10C

Used to withdraw EPS funds before completing 10 years of service.

Form 10D

Used to claim monthly pension after the age of 50, including widow pension, child pension, etc.

Non-Remarriage Certificate

Declares that the widow or widower has not remarried, required for continuing pension benefits.


Also read: National Pension Scheme

Conclusion

The Employee Pension Scheme (EPS) provides guaranteed monthly income after retirement to employees in the organised sector. The pension amount depends on their years of service and contributions. Knowing the eligibility criteria and different types of pensions under EPS can help employees make informed decisions for a secure future.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

Fixed Deposit Calculator

Sukanya Samriddhi Yojana Calculator

PPF Calculator

RD Calculator

EPF Calculator

Gratuity Calculator

Frequently asked questions

Can I withdraw my EPS amount?

Yes, you can withdraw your EPS amount if you have completed 10 years of service or if you are retiring at the age of 58. Partial withdrawal is also possible under certain conditions, such as unemployment.

Can I receive both EPS pension and returns from a Fixed Deposit simultaneously?

Yes, you can receive your EPS pension while earning returns from a Fixed Deposit. While EPS provides a steady post-retirement income, investing in a high-interest FD can help you supplement your pension and ensure greater financial security. With Bajaj Finance FD, you can earn returns of up to 7.95% p.a., ensuring stable and risk-free growth for your savings. Book your FD today to build a stronger financial future!

Is EPS mandatory for all employees?

Yes, EPS is mandatory for all employees who are part of the Employees' Provident Fund (EPF) scheme and earn a monthly salary of up to ₹15,000. It provides pension benefits after retirement.

Who is eligible for the EPS scheme?

Employees who are members of the Employees’ Provident Fund (EPF) and have completed at least 10 years of service are eligible for the Employees’ Pension Scheme (EPS). The scheme is available to employees earning a basic salary of up to Rs. 15,000 per month and provides a pension after retirement at the age of 58 years.

Who is not eligible for EPS pension?

Employees who haven't completed 10 years of service or are currently employed are ineligible to withdraw EPS funds. You can only withdraw once you've left your current job.

How much EPS pension will I get?

The EPS pension amount depends on your last drawn salary, years of service, and the contribution made to the Employee Pension Scheme (EPS). The formula used is (Pensionable Salary × Service Years) / 70, with a minimum monthly pension of ₹1,000.

What is EPS 95 pension scheme?

The EPS 95 pension scheme, introduced in 1995, is a social security initiative under the EPFO that provides a monthly pension to eligible employees after retirement, disability, or death. It ensures financial stability for employees with a minimum service of 10 years.

What is EPS limit?

The EPS limit refers to the maximum pensionable salary considered for contributions. As per current rules, the salary cap is Rs. 15,000 per month, meaning contributions are calculated based on this limit, regardless of the actual salary earned by the employee.

Is EPS the same as NPS?

No, EPS (Employee Pension Scheme) and NPS (National Pension System) are different. EPS is for salaried employees under EPF and offers a fixed pension post-retirement. The employer contributes, and employees can check balances via the EPFO portal. NPS, on the other hand, is voluntary, open to all Indian citizens, and offers market-linked returns. Contributors can view their balance on the NPS portal. Each scheme serves different retirement planning needs.

How do I check my EPS balance?

To check your Employee Pension Scheme (EPS) balance, visit the official EPFO website and log in using your Universal Account Number (UAN) and password. Go to the “Member Passbook” or “Pension Passbook” section to view your EPS balance and contribution details. This helps you keep track of your pension savings easily and securely.

Show More Show Less

Videos on Fixed Deposit

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.