Introduction

The Employees’ Pension Scheme, 1995 (EPS-95) is a cornerstone of India’s social security framework for organized sector employees. Launched by the Employees’ Provident Fund Organisation (EPFO) on September 16, 1995, EPS-95 provides lifelong pension benefits upon retirement, disability pension, and family pension to dependents in the event of the member’s demise. With over 60 million active members and growing, EPS-95 continues to evolve—recent policy tweaks, digital enhancements, and annual pension hikes ensure that pensioners receive timely, adequate benefits. This article delves into the fundamentals of EPS-95, eligibility norms, benefit calculations, and the latest updates you must know in 2025.

1. What Is EPS-95?

EPS-95 is one of the three schemes under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952:

• Employees’ Provident Fund Scheme (EPF): Retirement corpus.
• Employees’ Pension Scheme (EPS-95): Monthly pension.
• Employees’ Deposit Linked Insurance Scheme (EDLI): Insurance cover.

Under EPS-95, employers contribute 8.33% of the employee’s basic wages (subject to a wage ceiling of ₹15,000 per month) towards pension, while the government tops up a portion out of the EPF’s 12% contribution. The scheme ensures a minimum monthly pension of ₹1,000 (revised periodically) after 58 years of age, subject to at least 10 years of eligible service.

2. EPS-95 Eligibility and Coverage

2.1 Who Is Covered?

All salaried employees drawing up to ₹15,000 per month in basic wages plus dearness allowance are mandatorily covered under EPS-95 if their employer is registered with the EPFO. Voluntary coverage can be extended to employees earning above the wage ceiling.

2.2 Minimum Service Requirement

A minimum of 10 years’ pensionable service is required to qualify for a regular pension. In case of less than 10 years of service, the pensioner can withdraw the pension amount accumulated, subject to scheme rules.

3. EPS-95 Contributions and Fund Management

3.1 Contribution Structure

• Employee contribution: Nil (pension contribution wholly by employer).
• Employer contribution: 12% of monthly wages → 8.33% diverted to EPS-95; balance 3.67% plus entire employee share goes to EPF.
• Government contribution: Difference between actuarial requirement and employer share, as needed.

3.2 Pension Fund Management

The EPS-95 corpus is managed by the Central Board of Trustees (CBT) of EPFO and invested primarily in government securities to ensure safety and steady returns. Annual actuarial valuations determine the required government top-up to maintain scheme viability.

4. How Is EPS-95 Pension Calculated?

The monthly pension under EPS-95 is calculated using the formula:

Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
    

• Pensionable Salary: Average of last 60 months’ salary (capped at ₹15,000).
• Pensionable Service: Total years of contribution (max 35 years).

Example: An employee with average pensionable salary of ₹12,000 and 25 years of service receives:

Monthly Pension = (12,000 × 25) ÷ 70 ≈ ₹4,286

5. EPS-95 Benefits at a Glance

• Superannuation pension: From age 58 (or early pension at 50 with reduced rate).
• Disablement pension: In cases of total or partial disablement.
• Family pension: To spouse or eligible children after member’s death.
• Withdrawal benefit: Lump-sum withdrawal if service < 10 years.

6. Recent EPS-95 Updates You Must Know (2025)

6.1 Annual Pension Increase

For the financial year 2025–26, EPFO announced a 4% ad hoc pension increase for existing pensioners, effective July 1, 2025. This marks the third consecutive annual hike, aimed at cushioning inflationary pressures. Pensioners will see the revised amount credited along with their July pension disbursal.

6.2 Digital Enhancements

• Unified Member Portal: Launch of the “UMANG-EPFO” app integration for pension-related services—arrear statements, pension slip downloads, grievance redressal.
• e-KYC for Nominees: Biometric authentication for family pension claims reduces documentation delays.
• SMS Alerts: Automated alerts for pension disbursal, annual increase notifications, and service anniversaries.

6.3 Pension Disbursal via NPCI

EPFO has partnered with the National Payments Corporation of India (NPCI) to disburse pensions directly into pensioners’ bank accounts through the NACH system. This enhances reliability and reduces failed transactions.

6.4 Regulatory Clarifications

Recent EPFO circulars have clarified:

• Counting of broken periods of service (pre-1995) towards pensionable service.
• Grace period extensions for pension contributions during COVID-19 disruptions.

7. How to Claim Your EPS-95 Pension

7.1 Online Application (EPFO Portal)

1. Log in at Unified Member Portal.
2. Navigate to “Services → Pension → Apply for Pension.”
3. Fill Form 10D (for superannuation/disability) or Form 10C (for withdrawal benefit).
4. Upload requisite documents (ID proof, bank passbook, nomination certificate).
5. Submit; track status under “Track Application Status.”

7.2 Offline Application

1. Obtain physical Form 10D/10C from your employer or EPFO office.
2. Get employer attestation on service details.
3. Submit at regional EPFO office along with documents.

8. Common FAQs on EPS-95

Q1. Can I withdraw EPS contribution before 10 years?

A: Yes, by filing Form 10C you can withdraw the pension account balance, but you lose future pension entitlement.

Q2. What happens if I change jobs?

A: EPS-95 account is portable. Submit Form 13 for transfer through your new employer to continue uninterrupted pension savings.

Q3. Is there any minimum pension?

A: Yes, the minimum monthly pension under EPS-95 is ₹1,000.

Q4. How early can I opt for pension?

A: Early pension available from age 50, subject to actuarial reduction.

9. Tips to Maximize Your EPS-95 Benefits

• Ensure continuous contribution by updating UAN details and nomination records.
• Transfer EPS account promptly when changing jobs to avoid broken service periods.
• Regularly download and reconcile annual pension contribution statements.
• Keep bank account and KYC details up to date on the EPFO portal.

Conclusion

EPS-95 plays a vital role in securing post-retirement income for millions of Indian salaried workers. Understanding its eligibility criteria, benefit computations, and the latest policy enhancements ensures you can fully leverage the scheme. With the 2025 ad hoc increase, digital enrollments, and smoother disbursals via NPCI, EPS-95 continues to strengthen India’s pension ecosystem. Stay informed, keep your records updated, and claim your rightful pension benefits seamlessly.