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In the event that a position is changed, what happens to the EPS amount?

Previously, you needed to fill out two forms in order to change jobs:

To attest to your membership in Employees' Provident Fund (EPF) schemes, submit Form 11.

To transfer your PF balance from the former employer to the present one, submit Form 13.

A composite Form 11 can now serve both purposes if you already have a Universal Account Number (UAN) and your Aadhaar has been verified for KYC in the EPF database. Forms 11 and 13 still need to be completed by everyone else.

How Do Employee Pension Plans Operate?

Connect 2 Payroll Processing Services in India, USA, and Global. Best ESI PF Consultant in Ahmedabad. The Employees' Provident Fund Organization (EPFO) is in charge of overseeing the Employees' Pension Scheme (EPS), often known as EPF Pension. Employees in the organized sector are eligible for a pension after retiring at age 58 under the system. However, in order to get the benefits of the program, an employee must have worked for the firm for at least ten years (but not continuously).

When EPS was first implemented in 1995, it made participation possible for both new and current EPF members. The Employee Provident Fund (EPF) receives 12% of the employee's pay from both contractual parties. Each month, 3.67% of the employer's portion is paid to the Employees' Pension Scheme (EPS), 8.33% of the employee's portion is provided to the EPF, and the employee's whole portion is given to the EPF. Connect 2 Payroll Processing Services in India, USA, and Global. Top ESI PF Consultant in Ahmedabad.

EPS computation

Based on the pensionable pay and pensionable service, an employee's monthly EPS, or pension amount, is determined after retirement. It is computed using the formula below:

Monthly Member Salary = (Service*Pensionable Salary) / 70

Pensionable Salary: The average monthly wage a person received over the 60 months prior to deciding to leave the Employees' Pension Plan.

Pensionable Service is the term used to describe a person's service tenure, or length of work. It is computed as the sum of the time spent working for several employers. If a person changes jobs, they have to get an EPS Scheme certificate and give it to their new employer.

As previously stated, an employee may take an early withdrawal from this pension fund, but only after completing ten years of non-continuous employment. There are several tax benefits available on the combined sum, and this fund is taxable.