EPFO Pension Types Explained: Understand the Different Benefits and Eligibility Criteria

In India, employees working in the organized sector benefit from the Employees' Provident Fund Organization (EPFO), which offers provident funds, insurance, and pension schemes. Both employees and employers contribute to this fund. EPFO is a government body operated by the Indian government, and every employee in the organized sector has an EPFO account where 12% of their salary is deposited.

Out of this, the employer also contributes an equal amount, but it's divided into two parts: 8.33% goes into the Employees' Pension Scheme (EPS), commonly known as the pension fund, while 3.67% is deposited into the Employees' Provident Fund (EPF). After leaving a job or upon retirement, employees are entitled to pension benefits from EPFO. Here's an overview of the various types of pensions available under EPS-95, including their eligibility criteria and benefits.

Types of Pensions under EPS-95

EPFO launched the Employees' Pension Scheme (EPS) in 1995, aimed at employees in the organized sector. To qualify for this pension scheme, an individual must either be at least 58 years old or have completed 10 years of service with an organization. The EPS-95 provides six types of pensions:

1. Superannuation Pension If an employee has worked in the organized sector for 10 years or more and retires at the age of 58 or older, they are eligible for the Superannuation Pension.

2. Early Pension Employees who have completed at least 10 years of service but retire before reaching 58 years of age, or if they stop working earlier, can avail of the Early Pension.

3. Disability Pension According to EPS-95 rules, if an employee becomes permanently disabled or completely incapacitated during their service, they are eligible for Disability Pension as financial support from EPFO.

4. Widow and Children Pension In the unfortunate event of an EPFO member's death, the EPFO provides financial assistance to their spouse. The spouse receives a monthly pension, and two children can receive a pension until they turn 25, helping with their education and upbringing.

5. Orphan Pension If both parents of an EPFO member have passed away, and the surviving children are left without any guardians, the EPFO provides a monthly pension to the children.

6. Nominee Pension If an EPFO member does not have a spouse or children, they can designate a nominee to receive the pension. If the nominee is a parent, both parents receive half of the pension each. If only one parent is nominated, that parent receives the full pension.