How EPS (Employees' Pension Scheme) works
From the employer's 12% PF contribution, 8.33% goes to EPS, but only on wages up to ₹15,000, so the EPS share is capped at about ₹1,250 a month. The pension you eventually get depends on your pensionable salary and years of service, not on a growing balance.
Why EPS (Employees' Pension Scheme) matters
EPS provides a lifelong pension after 10 years of service, which is separate from the EPF lump sum, so both together make up your PF retirement benefit.
How the EPS pension is worked out
Unlike EPF, the Employees' Pension Scheme does not build a withdrawable balance; it promises a monthly pension based on a formula. The pension is broadly your pensionable salary multiplied by your years of pensionable service, divided by 70. Because the contribution is capped at wages of ₹15,000, the pension for most members is modest, which is why EPS is best seen as a floor on top of the larger EPF lump sum rather than a full retirement income. A member needs at least ten years of eligible service to qualify for a pension, which is normally payable from age 58, with reduced or deferred options around that age.
Frequently asked questions
Why is EPS capped at about ₹1,250?
Because the 8.33% pension share is calculated only on wages up to ₹15,000, so 8.33% of ₹15,000, about ₹1,250, is the standard monthly EPS contribution.
When can I get the EPS pension?
After at least 10 years of eligible service, the pension is generally payable from age 58.