What is the EPFO Pension Scheme - Definition, Features & Benefits

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What is the EPFO Pension Scheme - Definition, Features & Benefits

Many of us feel scared when we try to imagine our life after retirement when we’re no longer earning. It is not easy and causes anxieties and insecurities, especially when our identity has been tied up with work for so long. 

In many cases, retired individuals become dependent on their children for expenses. After being financially independent for most of their lives, it might be uncomfortable for individuals to be dependent on other family members for money. This is why it is a good idea to invest in a pension scheme. The EPFO Pension Scheme is one of the best pension schemes in India. This scheme will allow you to save up a considerable amount of funds for your life after retirement. In this post, we’ll discuss this scheme with you.

What is the EPFO Pension Scheme?

The EPFO Pension Scheme is a social security program of the Employees' Provident Fund Organisation (EPFO). It provides a guaranteed pension to employees in the organized sector after they’ve retired from their jobs. The EPFO Pension Scheme was launched in 1995, and is thus also known as EPF 95 Pension Scheme. This scheme serves as a source of regular income for the retired individuals. 

EPFO Pension Scheme: Features

Let’s check out the features of EPFO Pension Scheme. This will enable you to grasp an idea about how this scheme works.

• To avail of the EPFO Pension Scheme, individuals are required to be members of EPFO.
• EPFO Pension Scheme is mandatory for salaried employees who earn up to Rs. 15000 salary (Basic Salary + DA). However, employees earning more than this amount can contribute to this scheme voluntarily.
• At least ten years of service is required to withdraw from the EPS fund. These years do not have to be continuous, so don’t worry.
• To be eligible for an EPF pension, you must be 58 years of age. It is possible to withdraw your EPS pension earlier if you are above 50 years of age, but you’ll receive it at a reduced interest rate. If you defer it by two years, you can receive an additional rate of 4% every year.
• Since 2014, Government of India provides EPF minimum pension of Rs. 1000 per month to pensioners under EPFO scheme.

What are the Benefits of EPFO Pension?

Here are the benefits of the EPF 95 pension. If the EPFO Pension isn’t mandatory for you, these benefits can help to convince you to enroll in the EPFO new pension scheme voluntarily:

• EPFO Pension Scheme is a government-run scheme. You can invest in this scheme without any worries. 
• You will receive guaranteed returns under this scheme.
• EPFO Pension Scheme provides a minimum of Rs. 1000 per month. 
• In case of the pensioner’s demise, the family will receive EPS pension. The pensioner’s spouse will continue to receive the EPS amount after the pensioner's demise. Then, the children will receive the pension amount until they’re 25. However, if they’re physically disabled, the pension amount will be received by them until their demise.
• In case of total disablement during service, the scheme member will receive EPS pension. If the EPFO pension scheme member becomes totally and permanently disabled during their time of employment, they are entitled to a monthly EPF pension even if they have not yet completed their pensionable service period.

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Conclusion

The EPFO Pension Scheme is a government-run initiative. This scheme provides individuals with a regular source of income after their retirement. It is mandatory for salaried employees earning up to Rs. 15000 to get enrolled in this scheme. However, salaried employees earning more than this amount of salary can voluntarily get enrolled in it. EPF minimum pension, at present, is Rs. 1000. However, in the future, this amount might be increased. By enrolling yourself in this scheme, you can get funds for living your post retirement life comfortably.

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