Employees’ Pension Scheme

The Employees’ Provident Fund Organisation (EPFO) recently allowed subscribers, who have retired after September 1, 2014, to opt for higher pension under the Employees’ Pension Scheme (EPS). Retired subscribers and those who continue to be in service can sign up for higher pension. But there is a catch. Subscribers will be eligible only when 12 per cent of the employee’s basic salary is contributed both by the employee and the employer with prior permission of the EPFO by the hiring entity. The employee’s contribution goes towards Employees’ Provident Fund (EPF), and the employer’s contribution is split between EPF and EPS. In 2014, EPF limited the maximum salary to be received as pension to Rs 15,000, according to the EPF website. HOW DOES IT WORK? EPS provides a fixed income as pension upon superannuation. Employees with a basic salary and...