Business: The Central government has amended the Employees’ Pension Scheme (EPS), 1995, under which withdrawal benefits will be given to employees with less than six months of service. According to a government statement issued on Friday, the amendment is expected to benefit over 7 lakh EPS members who leave the scheme after less than six months of contributory service. The Centre has also amended Table D to ensure that every month’s service period is taken into account and withdrawal benefits are given in proportion to the service period. Table D covers members who have not completed the required service period for eligibility for the scheme or members who have attained the age of 58 years. The amount that can be withdrawn will now depend on the number of months of service completed by the member and the salary on which the EPS contribution was received. Earlier, the withdrawal benefit was calculated based on the period of contributory service in completed years and wages paid in EPS contributions. This included six months of mandatory contributory service. Therefore, the benefits were given to the members after completing contributory service of six months and above. Members who left the scheme before six months did not get the benefit.
Members were entitled to withdrawal benefits after completing contributory service for six months or above. Members who left the scheme before six months did not get the benefit. This was the reason why many claims of members who exited before rendering the mandatory service were rejected. The report said that during the financial year 2023-24, about 7 lakh claims for withdrawal benefits were rejected due to contributory service being less than six months. The government estimates that revising Table D and simplifying the payment system will benefit more than 23 lakh employees under the scheme. The earlier estimate under Table D did not consider partial periods of service of less than six months after each year. According to the press release, this resulted in under-withdrawal in many cases. The revision will remove anomalies in the amount withdrawn by members. According to the government statement, every year more than 95 lakh EPS members leave the scheme before providing the mandatory ten years of contributory service for pension. Such employees are given withdrawal benefits as per the Employees’ Provident Scheme. The report said that more than 30 lakh withdrawal claims were settled in the financial year 2023-24. The Employees’ Pension Scheme was introduced in 1995 for organized sector employees. Employees eligible for the Employees’ Provident Scheme are also eligible for the Pension Scheme. Both employers and employees contribute to this fund, which is administered by the Employees’ Provident Fund Organisation (EPFO) under the Ministry of Labour and Employment.
