The Pension Scheme under the Employees’ Provident Fund and Miscellaneous Provisions Act applies to every establishment where 20 or more people are employed, these include any industry engaged in manufacture of  almost everything. The list of the included industries is present in the Schedule I of the Act.

Eligibility Criteria:

In order to be eligible for availing benefits under the Employees’ Pension Scheme (EPS), an individual has to fulfil the following criteria:

  • He should be a member of EPFO
  • He should have completed 10 years of service
  • He has reached the age of 58
  • He can also withdraw his EPS at a reduced rate from the age of 50 years
  • He can also defer his pension for two years (up to 60 years of age) after which he will get a pension at an additional rate of 4% for each year.

Contribution rates:

The contribution rate under the pension scheme is 8.33% of the employees pay (Basic+ Dearness Allowance)  from the employer’s side and nil from the employee’s side. Alongside this, the Central Government also contributes at the rate of 1.16% of the pay of the members of the Employees Pension Scheme and credit the contribution to the Employees’ Pension Fund. 

Pension contribution is not to be diverted and total employer share goes to the PF, when an employee crosses 58 years of age and is in service, then EPS membership ceases on completion of 58 years or when an EPS pensioner is drawing Reduced Pension and re-joins as an employee. In both the cases the Pension Contribution @8.33% is to be added to the Employer Share of PF.


There is a common form for all the three Schemes i.e. EPF, EPS and EDLI in the form of Form 2 (R) in which Member has to give the names of spouse and all children in the prescribed form. 

However, a Member not having any family can nominate any other person, but the nomination will become invalid in case of the member acquiring family.

Types of Pensions:

There are following types of pension under the EPS-

  • Widow Pension

Widow pension or vridha pension is applicable to the widow of the member eligible for a pension. The pension amount will be payable until the death of the widow or her remarriage. In case of more than one widow, the pension amount will be payable to the eldest widow.

The minimum pension amount has been increased to ₹ 1000 as of now. As per the pensionable salary of  ₹ 6,500 for member pensioners, the widow pension amount is calculated according to the table illustrated below. Note that the monthly pensionable salary has been increased to Rs 15,000 and hence a higher pension may be available :

Monthly Pensionable Salary for Widow Pension ( ₹ ) Monthly Widow Pension ( ₹ )
6200 2021
6250 2026
6300 2031
6350 2036
6400 2041
6450 2046
6500 2051
  • Child Pension

In case of death of the member, monthly children pension is applicable for the surviving children in the family in addition to the monthly widow pension. The monthly pension will be paid till the child attains the age of 25 years. The amount payable is 25% of the widow pension and can be paid to a maximum of two children.

  • Orphan Pension

In case the member dies and has no surviving widow, his children will be entitled to get the monthly orphan pension of 75% of the value of monthly widow pension. The benefit will be applicable for two surviving children from oldest to youngest.

  • Reduced Pension

A member of the EPFO can withdraw an early pension if he has completed 10 years of service and has reached the age of 50 years but is less than 58 years. In this case, the pension amount is slashed at a rate of 4% for every year the age is less than 58 years.

In case the member decides to withdraw the monthly reduced pension at the age of 56 years, he will get the pension at a rate of 92% (100% – 2 x4) of the original pension amount.

Lump-Sum Withdrawal:

As per the current rules, if an individual remains unemployed for one month he/she can withdraw 75% of his/her EPF corpus. The balance 25 per cent can be withdrawn if the member remains unemployed for more than two months

However, with regards to EPS, the lump-sum withdrawal amount is allowed if the service period is less than 10 years. If the total years of service period exceed 10 years, then he/she will be given a certificate of pension. This certificate mentions pensionable service, pensionable salary and the amount of pension due on the exit of employment.

Therefore, the lump sum complete withdrawal from EPF and EPS account (provided number of years of service is less than 10 years) can be done at the time of closing of account in the event of job-loss (and remaining unemployed for over 2 months), or at the time of retirement, death or due to permanent and total disability of member.

Pension disbursing banks::

At present, a total of 9 (nine) Nationalised Banks are authorised for payment of pension to the Govt. pensioners viz-

  • State Bank Of India
  • Union Bank of India
  • United Bank of India
  • Central Bank of India
  • Punjab National Bank
  • Bank of Baroda
  • Canara Bank
  • UCO Bank
  • Allahabad Bank