EPS Employee Pension Scheme EPFO — How Your Pension is Calculated
- EPS runs alongside EPF — you don't contribute separately
- Pension starts at age 58 (early pension from 50 with reduced rate)
- Less than 10 years — you can withdraw the EPS corpus (Scheme Certificate)
- Widow/nominee gets family pension on employee death
- No interest on EPS — different from EPF corpus
Most salaried employees know about EPF (Employee Provident Fund) but don't realize there's a separate pension scheme running alongside it. EPS — Employee Pension Scheme — is why your employer's 12% EPF contribution is split: 3.67% goes to EPF and 8.33% goes to EPS.
How EPS Works — The Basics
The Employees' Pension Scheme, 1995 is managed by EPFO. Key features:
- Employee contribution: Nothing — you don't contribute to EPS separately
- Employer contribution: 8.33% of Basic + DA (capped at ₹15,000 basic = max ₹1,250/month goes to EPS)
- Government contribution: 1.16% of basic (on wages up to ₹15,000)
- EPS is not a savings account — it's a defined benefit pension based on formula
Your EPF passbook shows only your EPF balance. EPS contribution is NOT shown in your passbook — it goes to a common pension fund at EPFO headquarters.
EPS Pension Formula
Pensionable Salary = Average basic salary of last 60 months (capped at ₹15,000)
Pensionable Service = Total years of service (subject to max 35 years)
Example: 20 years service, pensionable salary ₹15,000
Pension = (15,000 × 20) ÷ 70 = ₹4,286/month
When Can You Get the Pension?
| Scenario | Pension Age | Note |
|---|---|---|
| Regular pension | 58 years | Full pension |
| Early pension | 50–57 years | Reduced by 4% per year before 58 |
| Deferred pension | Up to 60 years | Increased by 4% per year after 58 |
| Short service (under 10 years) | Any age | Withdraw corpus or get Scheme Certificate |
What if You Have Less Than 10 Years of Service?
If you leave a job with less than 10 years total EPS service (across all employers), you cannot get pension. You have two options:
- Withdraw EPS corpus — get the accumulated EPS amount (not pensionable, no interest accrues on EPS). Fill Form 10C on EPFO portal.
- Get Scheme Certificate — preserve your EPS service years, carry forward to new employer. Useful if planning to return to covered employment.
EPS and the ₹15,000 Wage Cap
The 8.33% EPS contribution is calculated on the wage ceiling of ₹15,000. So maximum EPS contribution = ₹1,250/month regardless of your actual salary. Employees earning above ₹15,000 basic have only ₹1,250 going to EPS monthly.
There was a Supreme Court judgment (RC Gupta case, 2016) about higher pension on actual salary — this is called Higher EPS Pension. EPFO has allowed eligible employees to opt for higher pension based on actual salary for historical periods. This is a complex process — check EPFO's unified portal for your eligibility.
Family Pension Under EPS
If an EPS member dies (in service or after retirement), the nominee/widow/widower receives:
- Widow pension: Same as member's monthly pension (minimum ₹1,000)
- Children pension: 25% of member's pension for each child up to 2 children (until age 25)
- Orphan pension: 75% of member's pension if both parents are deceased
How to Check Your EPS Service History
- Login to EPFO Unified Member Portal (unifiedportal-mem.epfindia.gov.in)
- Go to "View" → "Service History"
- All employers with EPS service are listed
- For pension calculation, EPFO uses the total pensionable service across employers
EPS Pension Query? Ask Mulazim AI
Tell us your years of service and salary — we'll calculate your estimated monthly pension.
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