Changes in EPS Rule for Early Exit
The Employees’ Pension Scheme (EPS) is a very important part of the social security framework for Indian workers, as it provides financial stability in retirement. Recently, changes have been made by the Ministry of Labour and Employment in the calculation of lump sum without an amount of EPS on early exit. These changes sparked a debate among people. Let us know more about it and understand who benefits and who loses.
Earlier, if the employee was a member of a pension scheme for say 7 years or 8 months, the lump sum benefit would be received based on 8 years of service. Now, the employee will receive a lump sum benefit based on the number of days he worked. This may reduce the amount of benefit marginally.”
New Lump Sum Withdrawal of Table D
A new method of calculation for Table D has been made in the notification. Under this new method, the eligible employees are those who exit the pension scheme before 10 years.
According to the new ‘Table D’ the benefit will be calculated on the number of months an individual provides his services. Earlier, it was calculated on the number of years in which the service was completed.
An Advisor explained the calculation of the new lump sum pension involves determining the present value of future pension payments by including a discount rate for these payments. This will result in the time value of money and longevity risk. In short, the discount rate impacts the lump sum, higher rates decrease it while lower rates increase it.
Table D Return on Contribution
| Months of Service | Proportion of wages at exit |
| 1 | 0.08 |
| 2 | 0.17 |
| 3 | 0.25 |
| 4 | 0.33 |
| 5 | 0.42 |
| 6 | 0.51 |
| 7 | 0.6 |
| 8 | 0.68 |
| 9 | 0.77 |
| 10 | 0.85 |
| 11 | 0.94 |
| 12 | 1.02 |
| 13 | 1.1 |
| 14 | 1.18 |
| 15 | 1.26 |
| 16 | 1.34 |
| 17 | 1.42 |
| 18 | 1.51 |
| 19 | 1.59 |
| 20 | 1.67 |
| 21 | 1.75 |
| 22 | 1.83 |
| 23 | 1.91 |
| 24 | 1.99 |
| 25 | 2.07 |
| 26 | 2.16 |
| 27 | 2.24 |
| 28 | 2.32 |
| 29 | 2.4 |
| 30 | 2.49 |
| 31 | 2.57 |
| 32 | 2.65 |
| 33 | 2.73 |
| 34 | 2.82 |
| 35 | 2.9 |
| 36 | 2.98 |
| 37 | 3.06 |
| 38 | 3.15 |
| 39 | 3.23 |
| 40 | 3.32 |
| 41 | 3.4 |
| 42 | 3.49 |
| 43 | 3.57 |
| 44 | 3.65 |
| 45 | 3.74 |
| 46 | 3.82 |
| 47 | 3.91 |
| 48 | 3.99 |
| 49 | 4.08 |
| 50 | 4.16 |
| 51 | 4.25 |
| 52 | 4.33 |
| 53 | 4.42 |
| 54 | 4.51 |
| 55 | 4.59 |
| 56 | 4.68 |
| 57 | 4.76 |
| 58 | 4.85 |
| 59 | 4.93 |
| 60 | 5.02 |
| 61 | 5.11 |
| 62 | 5.2 |
| 63 | 5.28 |
| 64 | 5.37 |
| 65 | 5.46 |
| 66 | 5.55 |
| 67 | 5.63 |
| 68 | 5.72 |
| 69 | 5.81 |
| 70 | 5.9 |
| 71 | 5.98 |
| 72 | 6.07 |
| 73 | 6.16 |
| 74 | 6.25 |
| 75 | 6.34 |
| 76 | 6.42 |
| 77 | 6.51 |
| 78 | 6.6 |
| 79 | 6.69 |
| 80 | 6.78 |
| 81 | 6.87 |
| 82 | 6.95 |
| 83 | 7.04 |
| 84 | 7.13 |
| 85 | 7.22 |
| 86 | 7.31 |
| 87 | 7.4 |
| 88 | 7.49 |
| 89 | 7.58 |
| 90 | 7.68 |
| 91 | 7.77 |
| 92 | 7.86 |
| 93 | 7.95 |
| 94 | 8.04 |
| 95 | 8.13 |
| 96 | 8.22 |
| 97 | 8.31 |
| 98 | 8.41 |
| 99 | 8.5 |
| 100 | 8.59 |
| 101 | 8.68 |
| 102 | 8.78 |
| 103 | 8.87 |
| 104 | 8.96 |
| 105 | 9.05 |
| 106 | 9.15 |
| 107 | 9.24 |
| 108 | 9.33 |
| 109 | 9.33 |
| 110 | 9.33 |
| 111 | 9.33 |
| 112 | 9.33 |
| 113 | 9.33 |
‘Table B’ Under Family Pension Scheme
| YEARS | FACTOR |
| Less than 35 | 14.2271 |
| Less than 36 | 15.36555 |
| Less than 37 | 16.59509 |
| Less than 38 | 17.92303 |
| Less than 39 | 19.35722 |
| Less than 40 | 20.90618 |
| Less than 41 | 22.57909 |
| Less than 42 | 24.38586 |
‘Table B’ has been also revised by the government under the Family Pension Scheme. This scheme provides security to the dependants of deceased employees. It is calculated on the basis of factors that have changed over the years.
Those family members who cover the Family Pension Scheme earlier than 34 years of service but less than 42 years are eligible for this revised ‘Table B’.
For Official Notification – Click Here
