Top News

EPS News: Recently we have been hearing about EPFO ​​in the news. Some of the recent decisions taken by the company have benefited the subscribers while others have angered the trade unions. Recently, a key decision has been taken regarding the employee pension scheme. EPFO has changed a rule regarding its calculation.

The Ministry of Labor and Employment has issued two notifications amending the Employees Pension Scheme (EPS) rules. One of them is orders for full payment of EPS if the member exits the scheme before the completion of 10 years. Meanwhile, another notification has been issued for the employees who are eligible to get a pension under the Family Pension Scheme which preceded EPS, reported a leading media house.

As per EPS norms, a member is eligible for pension only after completing 10 years of service. But in case of premature exit from the scheme before that period, a lumpsum amount will be given instead of a pension. The Labor Department has now made changes to Table 'D' which is used to calculate the total eligible pay.

"Earlier, if the employee was a member of the pension scheme for 4 years and 7 months, he would get a lumpsum benefit based on 5 years of service. After 6 months it is counted as next year. But now the employee will get a lump sum based on 55 months of service. This may marginally reduce the benefit to staff,” said Puneet Gupta, partner, People Advisory Services, EY India.

Under the Family Pension Scheme, the pension benefits for the eligible members are calculated based on factor numbers. It assigns a number based on the completed years of the member. This figure is used to determine the number of years of service for which the pension benefits payable to the employee are calculated. Earlier this 'factor' was available for members who completed service up to 34 years. No 'factor' is provided for those above that.