What is the EPS Wages(Employee Pension Scheme)?
The Employee Pension Scheme (EPS) is a significant component of the Employees’ Provident Fund (EPF) Act, 1952, aimed at providing pension benefits to employees. It’s a social security scheme managed by the Employees’ Provident Fund Organization (EPFO) under the Ministry of Labour and Employment, Government of India.
The EPS Wages ensures that employees receive a pension after their retirement. A part of the employer’s contribution to the EPF is diverted to the EPS to fund the pension scheme.
Difference Between EPF and EPS
- EPF (Employees’ Provident Fund): EPF is a fund where both the employee and employer contribute a certain percentage of the employee’s salary every month. The fund is primarily for providing lump sum payments to employees upon retirement, resignation, or other defined cases.
- EPS (Employee Pension Scheme): EPS, on the other hand, is specifically designed to provide a pension to employees after their retirement. A portion of the employer’s EPF contribution goes towards funding the pension scheme.
Benefits under Employees’ Pension Scheme
- Pension Benefit: After retirement, an employee is eligible for a regular monthly pension based on the years of service and the average salary before retirement.
- Pension for Nominee: In the event of the employee’s death, a pension is provided to the nominee or legal heir.
FAQs
How to do EPS transfer online?
EPS transfer is automatically done when you transfer your EPF from one employer to another. There’s no separate online process for EPS transfer.
What happens to the EPS when the PF is transferred?
When PF is transferred, EPS is also transferred automatically. The pension amount is calculated based on the service period and the pensionable salary.
Also See: Stipend | variable component in salary | Lwf meaning in payslip
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