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Most EPF members don't realise that 8.33% of employer's 12% contribution goes to EPS (Employees' Pension Scheme), not the EPF account. This money accumulates into a pension corpus that pays a monthly pension from age 58.
Government benefits · Social Security
EPS (Employees' Pension Scheme): the pension inside your EPF you didn't know about
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Provisions
Employees' Pension Scheme 1995 | EPFO | IT Act, Sec 10(11)
Analysis
EPS pension formula: Monthly pension = (Pensionable salary × Pensionable service) ÷ 70. Pensionable salary is capped at ₹15,000/month (even if your salary is higher, unless your company opted for higher EPS, which some do). Minimum service for pension: 10 years. Less than 10 years: you can withdraw the EPS corpus (but lose the annuity). If you've changed jobs: ensure EPFO transfer of EPS, do not withdraw at each job change. Withdrawing EPS early = losing the pension permanently. EPFO higher pension: After Supreme Court order in 2022, employees who contributed on actual salary (above ₹15K cap) can apply for higher pension. Deadline has been extended, check EPFO portal for current status.
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