What is EPS?

Background

EPS (Employee Pension Scheme) is the pension component of the EPF system. A portion of your employer’s EPF contribution is diverted to EPS to fund a lifelong pension after you meet service and age conditions.

Explanation

Out of the employer’s 12% contribution, 8.33% of eligible salary (up to a statutory wage ceiling) goes into EPS each month. After meeting minimum service and age requirements, you can receive a monthly pension based on your pensionable salary and years of service, using formulas defined by EPFO.

Example

If your eligible basic is ₹15,000, about ₹1,249 per month goes into EPS. After 20+ years of service and reaching the specified age, EPS can give you a modest but steady pension that supplements EPF withdrawals, NPS and other income.

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