New Delhi: To enhance the welfare of employees, the Government of India has amended the Employees’ Pension Scheme (EPS), 1995, to ensure that members with less than 6 months of contributory service also receive withdrawal benefits. This amendment is expected to benefit over 7 lakh EPS members annually who previously left the scheme without any benefit due to their short tenure.
Additionally, the Central Government has modified Table D of the EPS, ensuring that every completed month of service is now taken into account when calculating the withdrawal benefit. This change aims to provide a fairer and more proportionate withdrawal benefit based on the actual number of months worked and the wages on which EPS contributions were received. It is estimated that more than 23 lakh members will benefit from this modification each year.
Under the previous rules, EPS members who left the scheme before completing the requisite 10 years of contributory service for pension were eligible for withdrawal benefits, but only if they had contributed for at least 6 months. This led to numerous claim rejections and grievances, as many members exiting the scheme before reaching the 6-month mark received no withdrawal benefit. In the financial year 2023-24 alone, approximately 7 lakh claims were rejected due to contributory service being less than 6 months.
The new amendment ensures that all EPS members who have not attained the age of 58 years as of June 14, 2024, will be entitled to withdrawal benefits, regardless of their length of contributory service. This change addresses the issue of claim rejections and provides much-needed financial support to short-term contributors.
Furthermore, the modification of Table D corrects the previous method of calculating withdrawal benefits, which ignored fractional periods of service rendered for less than 6 months after each completed year. The new calculation method will consider contributory service in completed months, ensuring a more accurate and fair payment of withdrawal benefits. For example, a member with 2 years and 5 months of contributory service and a monthly wage of Rs. 15,000 would previously receive Rs. 29,850 as a withdrawal benefit. Under the new rules, this member will now receive Rs. 36,000.