RetirementFinancial Glossary
EPS (Employee Pension Scheme)
Definition
A pension scheme linked to EPF where the employer contributes 8.33% of the employee's basic salary (capped at Rs 15,000, meaning maximum monthly EPS contribution is Rs 1,250). After 10 years of service, the employee becomes eligible for a monthly pension upon reaching age 58.
Why It Matters
EPS pension amounts are modest — a typical pension after 20 years of service might be Rs 3,000-5,000 per month. Many employees are unaware they are eligible. EPS also provides a widow/widower pension and children's pension in case of the employee's death, making it an important survivor benefit.