New Delhi: Employees covered under the Employees’ Pension Scheme (EPS-95) can begin receiving their pension as early as age 50, but doing so comes with a reduction in the monthly pension amount compared with starting at the standard retirement age of 58.
Under the EPS rules, a member who has completed at least 10 years of eligible service can opt for early pension between the ages of 50 and 58. However, the pension amount is reduced by 4 percent for every year the member starts drawing pension before turning 58, according to the scheme provisions.
For example, if a member begins receiving pension at 55 years of age, the pension would be reduced by 12 percent compared with the amount payable at 58.
The government has clarified that this is not a new rule, but part of the existing provisions under Paragraph 12(7) of the Employees’ Pension Scheme, 1995.
The normal pension age under EPS remains 58 years, provided the member has completed a minimum of 10 years of service under the scheme.
Interestingly, the scheme also allows members to defer pension beyond 58 years — up to age 60 — to receive a higher payout, with the pension increasing by 4 percent for each year of deferment.
The EPS is funded through contributions made under the Employees’ Provident Fund system, where 8.33 percent of the employer’s contribution goes toward the pension fund, along with a small contribution from the central government.
Overall, the EPS framework offers flexibility for workers who may need income earlier than retirement age, but the trade-off is a permanently lower pension amount if benefits are claimed before turning 58.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
