Those who have contributed to Employee Provident Fund also contribute to Employee Pension Scheme or EPS. If you have worked in an organization for more than 10 years and you want to withdraw from EPS you will not get your money but would get an EPS Scheme certificate, which you can use at age of 60 years to EPFO to get your pension. This article explains How EPS Works, What is EPS Scheme Certificate, EPS Withdrawal Form 10C, EPS Scheme Certificate and Pension and FAQ about EPS Scheme Certificate.
How EPS Works?
- An employee contributes 12 percent of his basic salary directly towards EPF.
- He does not contribute directly towards EPS. Of the employer’s share of 12 per cent, 8.33% is diverted towards the EPS, with a cap of Rs 1,250 (earlier Rs 541) a month. Even in the EPF managed by Trust, EPS is always with EPFO.
- When the employee switches jobs, the employee has the option to either withdraw the EPS amount or carry it forward to the next job. This, however, depends on the length of his service and his age.
- If you have worked for less than six months, the EPS contributions cannot be withdrawn as the EPFO rules say that for those who have not yet completed 180 days in the organisation, the withdrawal benefit is not admissible. One can, however, apply for the scheme certificate.
- If an employee has NOT completed 10 years in service, he can either withdraw the EPS amount or take the scheme certificate.
- The option to withdraw or take the scheme certificate has to be submitted by filling Form 10C. Recently, the EPFO introduced UAN based Form 10C but UAN based Form 10C can only be used for withdrawal and not for taking the scheme certificate.
- The employee won’t get the entire contribution in EPS(Rs 541/Rs 1,250 a month) back after applying through Form 10C. The amount received will be subject to Table D.
- Pension begins at the age of 58 and for that, one needs to fill Form 10-D through the last Employer.
EPS Scheme Certificate
EPS Scheme certificate is a certificate issued by the Employees Provident Fund Organisation(EPFO), Ministry of Labour, Government of India. stating therein the details of service of the PF member. The EPS Scheme Certificate shows the service & family details of a member who are eligible to get provident fund pension in case of death of the member. Scheme Certificate is also an authentic record of service.
EPS Scheme Certificate is issued if the Member has not attained the age of 58 while leaving an establishment and
- He applies for this certificate if his service is less than nine years and six months 10 years or
- Withdraws from EPF after completing 10 years of contribution to EPF then he cannot withdraw money from EPS and would get Scheme Certificate.
While leaving his organization, the employee can apply for withdrawal from EPS through Form 10C.
When he joins another establishment to which EPF applies, he can surrender the scheme certificate through the new employer and by doing so his past service will be added to the new service and his pensionable service would be cumulated.
EPS Withdrawal Form 10C
If you have contributed for less than 9 years and 6 months in EPS, One can withdraw from EPS by filling Form 10C through the employer or UAN based Form 10C to EPFO. Form 10C asks you to choose between the scheme certificate or withdrawal benefit. It is recommended to transfer your EPF and EPS account on switching jobs. For an employee, the service for six months or more is treated as one year. Therefore, 9 years and six months will be considered 10 years. The excerpt of Form 10C where one can fill for Scheme Certificate is shown below
Once 10 years are completed, the withdrawal benefit stops and one can only take the scheme certificate from the EPFO by filling the same Form 10C.
You can withdraw EPF both the employee and employer contribution by submitting Form 19.
Regarding EPS contribution the form that one can fill are given in table below
|Your Age||EPS Contribution||Form||Instructions|
|Less than 50 years||Less than 10 Years||10C||Withdrawal/Scheme Certificate|
|Less than 50 years||More than 10 Years||10C||Scheme Certificate(No Withdrawal benefit allowed)|
|Between 50 years to 58 years||More than 10 Years||10C/10D||Scheme Certificate or reduced Pension|
|Between 50 years to 58 years||Less than 10 Years||10C||Withdrawal/Scheme Certificate|
|Above 58 years||Less than 10 Years||10C||Withdrawal|
|Above 58 years||More than 10 Years||10D||Pension|
EPS Scheme Certificate and Joining a new Job
If you have taken a scheme certificate and you join a new job, you submit it to the EPFO through the new employer by filling details in Form 11. Form 11. Every employee needs to submit a declaration Form 11 when he takes up new employment in an organization which is registered under the EPF Scheme of 1952. EPF Form 11 is a self-declaration by new joinee about his status whether he is a member or nonmember of EPF / EPS in earlier employments and opt out of EPF. EPF Form 11 on Joining a New Job article explains what is EPF Form 11, contents of EPF Form 11 and instructions on how to fill it. When you leave the job, you will again have to fill Form 10C. The EPFO will add the new number of years in the scheme certificate showing the cumulative service record and give it back to you through your employer. It is not mandatory to inform the current employer about the previous employer. You will be alloted new PF account no and UAN.
When one leaves the job and withdraws and if decides to withdraw from EPF by filling in Form 10C. The EPFO will add the new number of years in the scheme certificate showing the cumulative service record and give it back to you through your employer.
One can do this till one reaches the age of 58 and then surrenders the certificate to the EPFO to start getting the pension. Or One may opt for an early pension (reduced to the extent) after 50 years provided one has completed 10 years of service.
EPS Scheme Certificate and Pension
To be eligible for the pension (for a lifetime and then family pension), one has to work minimum 10 years. Let’s see how much pension one could get after the hard times of a working life.
While working, the maximum amount that can go into the EPS of an employee is 8.33 percent of the employer’s share, but the basic pay is capped at Rs 15, 000. So the amount comes to Rs 1,250 each month, i.e., Rs 15, 000* 8.33 per cent. As the EPS funding is capped, the pension that one will get is also capped and is based on the following formula:
(Pensionable Salary * service period) / 70.
The pensionable salary is capped at Rs 15,000 and service period at 35 years. Therefore, irrespective of the actual years and the basic salary, the maximum monthly pension would be Rs 7,500.
Pension begins at the age of 58 and for that, one need to fill Form 10-D through the establishment in which the member last served. The establishment should furnish the certificate and wage particulars duly attested by the authorized officer. Form 10-D has a section where one can fill details about Scheme certificates as shown in the image below. One has to fill in the details about the Scheme Certificates such as Scheme Certificate Number(ex KN/MLR/13985) , Authority who issued the Scheme Certificate ( ex: Assistant Provident Fund Commissioner) Our article How to Fill EPS Pension Form 10D to claim EPS Pension explains it in detail.
FAQ about EPS Scheme Certificate
I have resigned from a company after working there for around 8 years. I am not able to decide whether I should go for the withdrawal of the pension fund or should I opt for the Scheme Certificate?
- Transfer your EPF account if you are joining a new organization.
- If you need money or are not keen to get EPS Pension then do EPS Withdrawal.
- If you opt for Scheme Certificate you would have to submit it to new Employer
I have resigned from a company after working there for around 12 years and I am less than 50 years old. I am not able to decide whether I should go for the withdrawal of the pension fund or should I opt for the Scheme Certificate?
Since you have 12 years service you can not withdraw the Pension Fund amount. There are two alternatives: But you can get a Scheme Certificate which would benefit you in getting a continuous service when you join another establishment.
- You can transfer your entire account- both PF and Pension- to new account on joining a new establishment where EPF exists by applying in form 13.
- Withdraw the Provident Fund by applying through Form 19 and applying for scheme certificate in form 10 C.
I have completed 24 years service and I am 51 years old. I want to know that if I apply for withdrawal will I get lump sum amount immediately and scheme certificate also to get the benefit of pension after at the age of 58.
You can withdraw from EPF but You cannot withdraw from EPS as you have more than 10 years of contribution to EPS.
You have two alternatives:
- Get Scheme Certificate which you can use to get Pension at age of 58 years.
- You can apply for getting pension early. You would get reduced amount.
Can my family claim my pension in case of my death?
The lifelong pension is available to the member. Upon his death, members of the family are entitled to the pension. In the case of death of member having a family, the pension is payable to (1) the spouse and (2) two children below 25 years of age. When a child reaches 25 years of age, the third child below 25 yrs of age will be given pension and so on.
- If the child is disabled, he may get the pension till his death.
- In any case, only 2 children will receive the pension at a time.
- If a member does not have a family, the pension is payable to single nominated person. One can change one nomination anytime within the framework of rules for such nomination. In other words, if one has a family, the nomination should be in favour of a member(s) of the family. If he/she has no family he/she can nominate anyone he/she wishes
- If not nominated and having a dependent parent, the pension is payable first to Father and then on father’s death to Mother.
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