Govt tweaks withdrawal EPS benefits for members with less than 6 months service 

The Centre on Friday tweaked the Employees’ Pension Scheme (EPS), 1995, to ensure that members with less than 6 months of contributory service can also withdraw funds. Every year, lakhs of EPS members leave the scheme prior to rendering the requisite 10 years of contributory service for pension. 

These members are given withdrawal benefit as per the provisions of the scheme. The new amendment will benefit more than 7 lakh EPS members every year who leave the scheme with less than 6 months of contributory service.

The government has also modified the EPS details to ensure that every completed month of service rendered is taken into account to give proportionate withdrawal benefit to the members. 

The amount of withdrawal benefit will henceforth depend upon the number of completed months of service rendered by the member and the wages on which EPS contribution was received. 

Till now, the withdrawal benefit was being calculated on the basis of the period of contributory service in completed years and the wages on which EPS contribution has been paid. Only after completing 6 months and above of contributory service, the members were entitled for such withdrawal benefit. Consequently, the members leaving scheme, before contributing for 6 months or more, used to get no withdrawal benefit. 

Due to the old clause, many claims were rejected as many members were exiting without having less than 6 months of contributory service. 

“During the FY 2023-24, approximately 7 lakh claims for withdrawal benefits were rejected due to contributory service being less than 6 months. Henceforth, all such EPS members who have not attained the age of 58 years as on 14.06.2024 will become entitled for withdrawal benefit,” the government notification said. 

“Earlier, the calculation under erstwhile Table D ignored the fractional period of service rendered for less than 6 months after each completed year. This resulted in lesser amount of withdrawal benefit in many cases. With the modification of Table D, the contributory service for calculating the withdrawal benefit will be now considered in completed months. This will ensure fair payment of withdrawal benefit. Like, a member taking withdrawal benefit after 2 years and 5 months of contributory service & wages of 15,000/- per months was earlier entitled to Rs. 29,850/- withdrawal benefit. Now he will receive Rs. 36,000/- withdrawal benefit,” the note clarified. 

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