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Employees Pension Scheme: What Happens If You Do Not Complete 58-Years?


All those who are part of the Employees Provident Fund (EPF) automatically become part of the The Employees Pension Scheme (EPS).


Now, if you are part of the Employee Pension Scheme and complete 58 years of age and 10 years of service, you are entitled to monthly pension. However, to avail pension you have to complete 50-years of age.

Employees Pension Scheme: What Happens If You Do Not Complete 58-Years?

How is pension calculated?

Pension calculation is not very tough. Pension is calculated as the average of the basic salary +DA of the last sixty months. Let us say the average in this case comes to Rs 50,000 and you have put in service of 20 years. The the employees pension would be calculated as follows:

50000x20/70= 14,285.

What happens to pension between 50 and 58 years of age?

Often readers ask: What if a person has completed 10-years of service and not completed 58 years. In short, what if he is between 50 and 58 years of age. In this case, the pension is slashed at the rate of 4 per cent every year. So, if you are 56 years of age, then the pension receivable would be 4x2= 8 per cent less and so on.


However, once you complete the age of 58, you can withdraw the entire pension amount. It is also important to remember that there is a maximum cap of Rs 15,000 payable under the EPS. This means you cannot receive more pension than a sum of Rs 15,000.

It is therefore important to remember that unless there is a dire necessity, it would not be prudent to withdraw your EPS or employee pension scheme.

What happens in case you do not complete 10-years of service?

In case individuals do not complete 10-years of service, they can withdraw the entire balance in the EPS. However, for this they need to be jobless for at least two months. Just in case you switch jobs, you can transfer the balance in the EPS amount.

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