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Everything You Must To Know About Employee Pension Scheme

Updated On Nov 04, 2021

The Employee Pension Scheme was launched in the year 1995 for the convenience of people working under different sectors of India. People included under Employee Provident Fund Scheme are entitled to Employee Pension Scheme. As per the latest changes made in the Employee Pension Scheme 12% salary of the employees shall be contributed towards the Employee Provident Fund account .

Under this scheme the employer can contribute into the Employee Pension Scheme on behalf of the employee, the employee cannot directly contribute to the Employee Pension Scheme. 

Eligibility Criteria for Employee Pension Scheme

Below mentioned are the eligibility criteria for Employee Pension Scheme:

  1. The individual should be a member of Employee Pension Fund (EPFO)
  2. An individual should have completed 10 years of service
  3. The employee has reached the age of 58 years
  4. The employee can withdraw their EPS at a reduced rate from the age of 50.

Terms and Conditions of Employee Pension Scheme

Below mentioned are some terms and conditions of Employee Pension Scheme:

  • An employee should have completed 10 years of service to be able to avail pension under this scheme.
  • The employee can avail pension under the scheme only if they are or have completed 50 years of age.
  • 1 EPF account is eligible for 1 person.

Types of Pension Under Employee Pension Scheme

Below mentioned are types of pensions available under the Emloyee Pension Scheme:

1. Widow Pension

Widow pension also known as Vridha pension is eligible for the widow member. The pension amount shall be paid until the demise of the widow or until the time she gets remarried. In case there are more than one widow member in the family, the pension amount shall be paid to the eldest widow. 

2. Child Pension

In case of an unforeseen demise of the member, the monthly children pension shall be provided to the surviving child in the family in addition to monthly widow pension. The pension amount shall be paid till the child attains the age of 25 years. The amount payable is equal to 25% of the widow pension and can be provided to a maximum of two children. 

3. Reduced Pension

The member can withdraw an early pension in case they have completed 10 years of service and are 50 years of age or less than 58 years of age. Under these circumstances the pension amount will slash at the rate of 4% every year. 

4. Orphan Pension

In case of an unforeseen demise of the member and no widow, the surviving children will receive orphan pension which is equal to 75% of the monthly widow pension. 


Under this scheme members of EPFO get pension benefits when they choose to retire at the age of 58 years. The minimum service years to avail pension benefit under this scheme is 10 years. In case of an unforeseen demise of the member the widow and the children receive a monthly pension to fulfill their daily financial obligations and meet their goals. 

Also read - How Important Is Retirement Planning?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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