After retirement, the benefit of fund and pension is available in Employee Pension Scheme (EPS). This scheme is operated by the Employees Provident Fund Organization (EPFO). In the EPS scheme, employees invest a fixed amount of their salary every month. Along with the employee, the company also contributes.
This scheme matures after retirement. When the scheme matures, a part of the fund is received as a lump sum and the rest is given monthly as pension. Although many people get the benefit of EPS pension only after retirement. But, many employees are unaware that in the EPS scheme, one gets the benefit of pension along with the job. We will tell you about this.
How much contribution has to be made every month
The employee gives 12 percent of his basic salary to EPFO. Out of this 12%, 8.3% is deposited in the PF account and the remaining 3.67% is deposited in the EPS scheme. The amount deposited in EPS is given as pension after maturity.
When does one get pension along with the job?
According to the EPFO rules, the employee gets the benefit of EPS pension when he invests continuously for 10 years. Apart from this, when the age of the employee exceeds 50 years, he can claim for pension. If the employee contributed to the EPS scheme for 10 years but his age is less than 50 years, then he cannot claim for pension.
Less pension is available in early pension
If the age of the employee is between 50 to 58 years and he claims pension before retirement, then he will get less pension amount. Actually, according to the rules of EPFO, there is a deduction of 4 percent every year in early pension.
Understand it this way that if a person is 52 years old and he claims for early pension, then he will get only 76% of the pension amount now. This is because the age for receiving pension is 58 years and he is claiming for pension 6 years earlier. In such a situation, at the rate of 4% per annum, there will be a reduction of 24% in the pension amount in 6 years.
