Employees’ Pension Scheme 1995 amended, over 7 lakh members to benefit each year

The government also amended Table D to ensure proper payment of withdrawal benefits; over 23 lakh members to benefit from this amendment

The Government of India has amended the Employees’ Pension Scheme (EPS), 1995 to ensure that Employees’ Pension Scheme members with less than 6 months of contributory service can also get withdrawal benefits. This amendment will benefit over 7 lakh Employees’ Pension Scheme members each year who leave the scheme after less than 6 months of contributory service.

Further, the Central Government has amended Table D and ensured that each full month of service is taken into account to pay proportionate withdrawal benefits to members. The amount of withdrawal benefit will now depend on the number of full months of service rendered by the member and the salary on which the Employees’ Pension Scheme contributions were received. The above measure has rationalised the payment of withdrawal benefits to members. It is estimated that more than 23 lakh members will benefit from this amendment of Table D every year.

Every year lakhs of employee members of Pension Scheme 95 leave the scheme before rendering the required 10 years of contributory service for pension. Such members are given withdrawal benefits as per the provisions of the scheme.

More than 30 lakh withdrawal benefit claims were settled in the financial year 2023-24.

So far, withdrawal benefits were being calculated on the basis of the period of contributory service in completed years and the salary on which the Employees’ Pension Scheme contributions have been paid.

Therefore, members were eligible for such withdrawal benefits only after completing 6 months and above of contributory service. As a result, members leaving the scheme before contributing for 6 months or more were not entitled to any withdrawal benefits. This was the reason for many claims being rejected and complaints as many members were leaving the scheme without rendering contributory service for less than 6 months. During the financial year 2023-24, about 7 lakh claims for withdrawal benefit were rejected due to contributory service of less than 6 months. After this amendment, all such Employees’ Pension Scheme members who have not attained the age of 58 years by 14.06.2024 will become eligible for withdrawal benefit.

Earlier, in the calculation under the erstwhile Table D, partial period of service rendered for less than 6 months after each full year was ignored. This resulted in lower amount of withdrawal benefit in many cases. With the amendment of Table D, contributory service will now be considered in full months for calculation of withdrawal benefit. This will ensure proper payment of withdrawal benefit. For example, a member taking withdrawal benefit after 2 years and 5 months of contributory service and salary of Rs. 15,000/- per month was earlier entitled to withdrawal benefit of Rs. 29,850/-. Now he will get withdrawal benefit of Rs. 36,000/-.