The Central government has amended the Employee Pension Scheme (EPS), 1995, allowing withdrawal benefits for employees with less than six months of service. This change is expected to benefit over seven lakh EPS members who leave the scheme early.
The amendment modifies Table D to account for each month of service. This ensures proportional withdrawal benefits based on the service period and wages on which EPS contributions were made. Previously, employees needed at least six months of contributory service to qualify for withdrawal benefits, leading to the rejection of many claims. During the financial year 2023-24, around 7 lakh claims were denied due to insufficient service duration.
The government estimates that the revised Table D and simplified payment system will benefit more than 23 lakh employees. The new rules address previous discrepancies in withdrawal amounts by including fractional periods of service in six months.
According to a government statement, over 95 lakh EPS members leave the scheme annually before completing the mandatory ten years of contributory service required for a pension. These employees are eligible for withdrawal benefits under the Employees’ Provident Scheme. In the financial year 2023-24, more than 30 lakh withdrawal claims were settled.
Introduced in 1995, the Employee Pension Scheme covers employees in the organised sector. Employees eligible for the Employees’ Provident Fund Scheme are also eligible for the pension scheme, with both employer and employee contributing to the fund, administered by the Employees’ Provident Fund Organisation (EPFO) under the Ministry of Labour and Employment
