power point presentation on EMPLOYEE PENSION SCHEME.docx

BACKGROUND,OBJECTIVES,KEY DEFINITIONS,Key Provisions,Rights, Duties, and Liabilities,Enforcement Mechanism and Authorities
,Relevance in the Contemporary Socio-Economic Context, Suggestions and Critical Appraisal,Conclusion

1. EMPLOYEE PENSION SCHEME
1.BACKGROUND
· The Employees’ Pension Scheme (EPS), 1995 was introduced under the
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
· It replaced the Employees’ Family Pension Scheme (EFPS), 1971 to provide a more
comprehensive and unified social security framework.
· It was implemented on 16th November 1995 by the Government of India.
●Difference between EFPS 1971 and EPS 1995
Basis Employees’ Family Pension Scheme
(EFPS) 1971
Employees’
Pension Scheme
(EPS) 1995
1.Purpose

Provided family pension to
dependents after the employee’s
death.
Provides retirement,
family, and
disability pensions
under one scheme.
2.Coverage Only covered family pension. Covers retirement,
family, and
disability
3.Contributions No fixed contribution, came from
EPF or employer.
Employer
contributes 8.33%
of salary (up to
15,000).
₹
4.Eligibility 10 years of service for family
pension.
10 years for
retirement pension
while family or
disability pension
available
immediately
5.Administration Managed separately, limited scope.Managed by EPFO,
integrated with
EPF.
6.Status Replaced by EPS in 1995. In force since 16
November 1995.

2. 2.OBJECTIVES
●To ensure long-term financial security for employees after retirement.
●To provide a family pension in case of the death of an employee.
●To support employees through disability pension in case of permanent incapacity.
●To create a uniform, contributory pension system under the Employees’ Provident Fund
Organisation (EPFO).

3.Scope and Applicability
· Legal Basis: Framed under Section 6A of the EPF & MP Act, 1952.
· Applicability:
o Applies to all establishments covered under the EPF Act.
o Mandatory for all employees who are EPF members and earning up to 15,000/month
₹
o Employees joining after 16 Nov 1995 automatically become EPS members.
· Coverage:
o Provides retirement pension, family pension, and disability pension.
o Applies to both public and private sector employees under EPFO.

4.KEY DEFINITIONS
· Pensionable Salary: The average monthly pay during the last 60 months of service.
· Pensionable Service: The total number of years of eligible service contributing to EPS.
· Member: Any person who is an employee of a covered establishment and contributes to EPF/EPS.
· Actual service: means the aggregate of the period of service rendered from 16th November 1995
or from the date of joining any establishment, whichever is later to the date of exit from the
employment of the establishment covered under the Act
· Family: " Family " means (i) wife in the case of a male member of the Employees' Pension Fund;
(ii) husband in the case of a female member of the Employees' Pension Fund; and(iii) sons and
daughters of a member of the Employees' Pension Fund
5.Key Provisions
Contribution Structure:
In 2025, the employee pension scheme contribution structure involves an employer contributing 8.33% of
an employee's basic salary and dearness allowance (DA) to the Employee Pension Scheme (EPS), up to a

3. maximum salary of 15,000. Employees do not contribute to the EPS directly ,their entire 12%
₹
contribution goes to the Employee Provident Fund (EPF), while the remaining 3.67% of the employer's
12% contribution also goes to the EPF.
Types of Pensions Provided:
1.Superannuation/Retirement Pension: Payable on attaining 58 years of age after at least 10
years of service.
2.Family Pension: Payable to nominated family members upon the death of the employee.
3.Disability Pension: Payable in case of permanent and total disablement before age 58.
4. Pension Formula:
6: Rights, Duties, and Liabilities
Employers:
●Must deduct and deposit the prescribed contributions to EPFO on time.
●Maintain accurate employee records (service period, wages, etc.).
●Notify EPFO of employee’s death, retirement, or transfer promptly.
●Liable for penalties if contributions are delayed or misreported.
Employees:
●Right to receive pension after meeting eligibility criteria.
●Entitled to nominate family members for benefits.
●Must ensure details (KYC, Aadhaar, nomination) are updated with EPFO.
●Duty to submit accurate claim forms for pension withdrawal or transfer.

7: Enforcement Mechanism and Authorities
●Administered by:
○Employees’ Provident Fund Organisation (EPFO) under the Ministry of Labour &
Employment.
●Authorities:
○Central Board of Trustees (CBT) oversees implementation.
○Regional EPF Commissioners handle compliance and grievance redressal.
●Enforcement Measures:
○Regular inspections and audits of establishments.
○Penalties under the EPF Act for default or non-compliance.
○Provision for appeals and legal remedies under EPF Tribunal.
●Transparency Tools:
○Online portal for EPS status, pension disbursement, and claim tracking.

8: Relevance in the Contemporary Socio-Economic Context

4. ●Social Security Net: Provides financial protection to over 60 million workers in India’s
organized sector.
●Economic Importance: Reduces post-retirement dependency on family and government welfare
schemes.
●Supports Formalization of Workforce: Encourages employees to join organized sector jobs due
to guaranteed post-retirement income.
●Digital Reforms: Introduction of UAN, online claim submission, and Aadhaar linkage have
improved accessibility and transparency.
●Gender Perspective: Family pension provides support to widows and dependent children,
ensuring continuity of income.
●Challenges:
○Low pension amounts relative to inflation.
○Limited coverage in informal sector.
○Rising life expectancy increases fund pressure.
9: Suggestions and Critical Appraisal
Strengths:
●Comprehensive — covers retirement, death, and disability.
●Contributory and portable across establishments.
●Administered by a central authority (EPFO) ensuring uniform implementation.
Limitations:
●Low pension quantum due to outdated salary ceilings.
●Lack of periodic revision of pension formula and contribution rates.
●Complex claim process for illiterate or rural workers.
●Limited inflation protection — fixed minimum pension doesn’t keep pace with cost of living.
Recommendations / Reforms:
●Periodic revision of wage ceiling and contribution rates to reflect inflation.
●Introduce indexation of pensions to cost-of-living adjustments.
●Extend EPS-like social security to informal sector workers.
●Simplify and digitize the claim process further.
●Improve awareness programs for employees and employers.

10: Conclusion
●EPS 1995 represents a major step in India’s social security framework, ensuring financial
stability for millions of workers.
●It has successfully integrated retirement, family, and disability pensions under one umbrella.
●However, sustainability and adequacy of benefits remain challenges.
●Future reforms must focus on updating contribution structures, inflation-adjusted benefits,
and wider coverage to meet the evolving socio-economic realities.