look news india
Rule changes: The central government on Friday made changes in the Employees' Pension Scheme (EPS), 1995. Now even members who have contributed for less than 6 months will be able to withdraw money. This change will benefit lakhs of EPS employees. In fact, every year lakhs of EPS members leave the scheme before completing the 10 years of contributory service required for pension. In this, the number of people leaving the scheme within 6 months is higher.
Under EPS, those who left the scheme before 10 years were given the facility of withdrawal, but those who left the scheme before 6 months were not given the facility of withdrawal on their contributions. However, now the government has given a big relief by changing this rule. The new amendment will benefit more than 7 lakh EPS members every year, who leave the scheme after less than 6 months of contributory service.
The government also changed this rule
The government has also amended the EPS details to improve the scheme. From now on, the withdrawal benefit will depend on the number of months the member has served and how much EPS contribution has been made on the salary. This rule will make withdrawal easier. More than 23 lakh EPS members will benefit from this change.
What was the rule earlier?
Till now, the withdrawal benefit was calculated based on the period of contributory service in completed years and the salary on which EPS contributions have been paid. Members were entitled to such withdrawal benefit only after completing 6 months or more of contributory service. As a result, members who left the scheme before contributing for 6 months or more did not get any withdrawal benefit.
7 lakh claims rejected
The old rule resulted in many claims being rejected as many members would exit without less than 6 months of contributory service. According to the government notification, about 7 lakh claims for exit benefits were rejected due to less than 6 months of contributory service during the financial year 2023-24. Now those EPS members who have not attained the age of 58 years by 14.06.2024 will be entitled to exit benefits.
What is EPS?
People often get confused about EPS. Actually, it is a pension scheme, which is managed by EPFO. Under this scheme, contributions have to be made for 10 years, then you become entitled to pension after retirement. Existing and new EPF members are included under this scheme.
Both the employer/company and the employee contribute equally to the EPF fund i.e. 12% of the employee's salary. However, the entire share of the employee's contribution goes to the EPF and 8.33% of the employer/company's share goes to the Employees' Pension Scheme (EPS) and 3.67% goes to EPF every month. The pension benefit will be given after completing at least 10 years of service and after retirement.
