Big Changes in EPFO and EPS Rules: Here's How It Is Good News for Frequent Job Switchers?

big changes in epfo and eps rules: here's how it is good news for frequent job switchers?

The Centre has made significant changes to the Employees' Pension Scheme (EPS) rules, bringing good news for those who frequently switch jobs. Previously, employees with less than six months of service could not withdraw money contributed towards the EPS.

What Is New Rule?

Now, even if you have contributed to EPS for less than six months, you can withdraw your money.

What Has Changed?

Before the changes, employees who left their jobs before completing six months could only withdraw their EPF contributions, not the EPS money. Now, they can withdraw both EPF and EPS contributions, even if they leave the job before six months.

How EPFO Contributions Work?

Under the Employees' Provident Fund Organisation (EPFO) scheme, employees in private organizations contribute 12 per cent of their basic salary to the provident fund, with the employer matching this contribution. Of the employer's contribution, 8.33 per cent goes towards the employee's pension corpus (EPS), while 3.67 per cent goes into the employee's EPF corpus.

Amendment In EPS, 1995

The Centre has amended the EPS, 1995, to ensure that members with less than six months of contributory service can receive withdrawal benefits.

What Is Benefit Of This Amendment?

This amendment will benefit over 7 lakh EPS members annually who leave the scheme with less than six months of service, according to the Labour Ministry.

Updation Of Table D

Additionally, the Centre has updated Table D to ensure every completed month of service is counted for proportionate withdrawal benefits.

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What Is Table D?

Table D refers to members who have not met the required service period for the scheme’s eligibility or have reached 58 years of age.

Impact on EPS Members

Every year, many EPS members leave the scheme before completing the 10 years of contributory service needed for a pension. These members receive withdrawal benefits as per the scheme's provisions. In the financial year 2023-24, more than 30 lakh withdrawal benefit claims were settled, according to the Labour Ministry.

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