Good news for EPS members! 'Withdrawal benefits' - Govt amends Employees Pension Scheme 1995 - Details

good news for eps members! 'withdrawal benefits' - govt amends employees pension scheme 1995 - details

The Government has amended the Employees’ Pension Scheme (EPS), 1995, ensuring that EPS members with less than six months of contributory service now receive withdrawal benefits. This significant reform is set to benefit more than 7 lakh EPS members annually who previously left the scheme without receiving any benefits due to insufficient service duration.

Fair Calculation: Table D Modification

In addition to extending benefits to short-term members, the government has modified Table D, ensuring that every completed month of service is considered when calculating withdrawal benefits. Previously, only complete years of service were considered, ignoring any fractional periods less than six months. This resulted in many members receiving lower withdrawal benefits. The revised Table D ensures proportional benefits based on the exact number of completed months of service and the wages on which EPS contributions were made.

Every year, lakhs of EPS 95 members leave the scheme before completing the requisite 10 years of contributory service required for a pension. These members are entitled to withdrawal benefits as per the scheme's provisions. In the financial year 2023-24 alone, more than 30 lakh withdrawal benefit claims were settled. However, many claims were rejected due to members having less than six months of contributory service. In the same year, approximately 7 lakh claims were rejected for this reason.

The amendment to the EPS 1995 aims to address the grievances arising from claim rejections. The modification of Table D will ensure that contributory service for calculating withdrawal benefits is considered in completed months, rather than years. For instance, a member with 2 years and 5 months of contributory service and a monthly wage of Rs 15,000 was previously entitled to a Rs 29,850 withdrawal benefit. With the new calculations, the member will now receive Rs 36,000.

All EPS members who have not attained the age of 58 years as of June 14, 2024, will now be entitled to withdrawal benefits, ensuring greater financial stability and addressing long-standing grievances within the scheme.