8.33 per cent of the PF contribution made by the employee’s employer is deposited in EPS.
Published: February 9, 2026 7:44 PM IST
New Delhi: The EPFO pension scheme, or EPS, is extremely important for millions of employees working in the private sector. PF contributions are deducted every month during employment, but most employees don’t understand when they will receive their pension, how much it will be, or under what conditions. While the PF balance is visible in the passbook, the pension calculation is based on rules and formulas. In recent years, understanding EPS has become even more difficult due to changes in EPFO rules, salary limits, and court orders.
Minimum age and service condition for EPFO pension
Two conditions are most important for receiving a monthly pension under EPS. First, the employee must have completed at least 10 years of pensionable service, and second, they must be 58 years old. Here, pensionable service means the period during which the employer contributed to EPS and the employee transferred their PF, not withdrew it. Less than 10 years of service does not entitle one to a lifetime pension.
How money is deposited in EPS; Impact of salary limit
8.33 per cent of the PF contribution made by the employee’s employer is deposited in EPS. However, this contribution is based only on a fixed salary limit. This means that no matter how high your actual salary is, the pension calculation does not increase beyond a certain limit. This is why even high-salaried individuals receive a limited pension, and it cannot be increased like an investment.
Disadvantages of taking pension at age 50
If an employee wants to take a pension before the age of 58, i.e., after the age of 50, it is considered an early pension. In such a situation, a permanent reduction is made in the pension amount. On the other hand, if the employee delays taking the pension after the age of 58 and waits until 60, they may receive a slightly higher pension. This means that the timing of your pension directly affects your monthly benefit.
Pension benefits if you leave your job before 10 years
If an employee leaves their job before completing 10 years of service under EPS, they do not receive a monthly pension. In such cases, the EPFO provides a one-time withdrawal benefit. This amount is determined based on a service table, where a factor is assigned according to the years of service and multiplied by the pensionable salary. This amount is usually limited and does not constitute a lifetime pension option.
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