The Employees’ Provident Fund Organisation (EPFO) administers one of India’s largest social security schemes for salaried employees. While most employees are familiar with the Employees’ Provident Fund (EPF), many are unaware of the pension benefits available under the Employees’ Pension Scheme (EPS), 1995, and the role of Form 10C in claiming those benefits.
This FAQ explains the key provisions relating to EPS pension, Form 10C, eligibility conditions, documentation requirements, and important aspects of retirement planning.
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What is the Employees’ Pension Scheme (EPS), 1995?
The Employees’ Pension Scheme (EPS), 1995 is a social security scheme administered by EPFO that provides pension benefits to employees after retirement, as well as to their families in certain circumstances.
Under the EPF framework, both the employee and employer contribute 12% of the employee’s basic salary and dearness allowance. Out of the employer’s contribution, 8.33% is diverted to the EPS account, subject to the prescribed wage ceiling.
Who is eligible for pension under EPS?
An EPF member becomes eligible for a monthly pension upon attaining the age of 58 years, provided they have completed at least 10 years of eligible service under the EPS scheme.
Members who have contributed to EPS for less than 10 years are generally not entitled to a regular monthly pension but may be eligible for withdrawal benefits.
How is EPS pension calculated?
The pension amount is determined using the following formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
For example, if an employee contributes based on the wage ceiling of ₹15,000 and completes 35 years of pensionable service:
(₹15,000 × 35) ÷ 70 = ₹7,500 per month
Thus, such a member may receive a monthly pension of approximately ₹7,500 after retirement.
Can a member delay receiving pension beyond 58 years?
Yes. EPS members may defer their pension commencement up to the age of 60 years.
A member can either:
Option 1: Stop Contributions After 58
The pension amount remains with EPFO and earns an additional 4% annual enhancement until age 60.
Option 2: Continue Employment and Contributions
If the member continues working and contributing for an additional two years, the increased service period and accumulated contributions can result in a higher pension payout.
What happens to the EPF corpus at retirement?
Upon retirement, a member can withdraw the entire accumulated EPF balance as a lump sum.
Simultaneously, the member can retain eligibility for pension benefits under EPS by obtaining a Scheme Certificate, which preserves pensionable service and enables future pension claims.
What is a Scheme Certificate?
A Scheme Certificate is a document issued by EPFO that records a member’s pensionable service under EPS.
It is generally useful when:
- A member leaves employment before becoming eligible for pension.
- Pensionable service needs to be preserved for future pension claims.
- The member wishes to withdraw PF accumulations but continue EPS membership.
The certificate can later be used to claim pension benefits upon attaining the eligible age.
What is Form 10C?
Form 10C is an EPFO application form used primarily for:
- Claiming EPS withdrawal benefits.
- Obtaining a Scheme Certificate.
- Preserving pensionable service.
- Certain pension-related claims in specific situations.
It is one of the most important forms under the EPS framework.
Who can submit Form 10C?
Form 10C can be filed by:
1. Members who retired before completing 10 years of service
Such members may claim withdrawal benefits instead of pension.
2. Members who attained 58 years before completing 10 years of service
These members can apply for withdrawal benefits.
3. Members with 10 years of service but below 50 years of age
Such members may apply for a Scheme Certificate to preserve pension rights.
4. Members between 50 and 58 years of age
Eligible members may apply for pension benefits according to applicable EPS provisions.
5. Family members or nominees of deceased members
Where a member dies after attaining 58 years but before completing 10 years of service, eligible family members or nominees may submit Form 10C.
Can Form 10C be used during unemployment?
Yes. In certain circumstances, members who remain unemployed for more than two months may use Form 10C for eligible pension-related benefits while maintaining continuity under the EPFO framework.
What benefits can be claimed through Form 10C?
The primary benefits available through Form 10C include:
Withdrawal Benefit
Members with insufficient service for pension eligibility may claim withdrawal benefits from EPS.
Scheme Certificate
Members can preserve their pensionable service for future pension entitlement.
When is Form 10D required instead of Form 10C?
Certain pension claims require submission of Form 10D rather than Form 10C.
These include:
- Claims for regular monthly pension.
- Reduced pension claims.
- Pension claims arising from permanent disablement.
Members should carefully verify the applicable form before filing a claim.
What information must be provided in Form 10C?
Applicants are required to furnish:
- Name
- Universal Account Number (UAN)
- Aadhaar Number
- PAN
- Father’s or husband’s name
- Date of birth
- Date of joining service
- Date of leaving service
- Reason for leaving employment
- Bank account details
- Postal address
What documents are required with Form 10C?
Depending on the nature of the claim, the following documents may be required:
Mandatory Documents
- Copy of cancelled or blank cheque
- Identity and bank account details
For Scheme Certificate
- Date of birth certificates of children, wherever applicable
In Case of Death of Member
- Death certificate of the member
For Legal Heirs
- Succession certificate or other legal heir documentation
Additional Requirement
- Revenue stamp of ₹1 affixed to the application where required
What is the current EPF interest rate?
The current EPF and Voluntary Provident Fund (VPF) interest rate stands at 8.25% per annum.
The rate is reviewed periodically and notified by EPFO.
Who is required to join EPF?
Employees drawing basic salary and dearness allowance up to ₹15,000 per month are generally required to be enrolled under EPF.
Employees earning above this threshold may also join EPF subject to applicable conditions and mutual agreement between employer and employee.
What is Voluntary Provident Fund (VPF)?
VPF allows employees to contribute an amount higher than the mandatory EPF contribution.
These additional voluntary contributions earn the same interest rate as EPF and can be used as a long-term retirement savings tool.
What are the tax benefits available under EPF?
Employee Contributions
Contributions up to ₹1.5 lakh annually qualify for deduction under Section 80C under the old tax regime.
Employer Contributions
Employer contributions up to the prescribed limits remain tax-exempt under applicable tax provisions.
Interest Earned
Interest on employee contributions up to ₹2.5 lakh annually remains tax-free, subject to prevailing tax rules. Interest on eligible employer contributions also enjoys tax benefits.
Key Takeaway
The Employees’ Pension Scheme provides an important source of post-retirement income for salaried employees, but many subscribers overlook crucial aspects such as pension eligibility, Scheme Certificates, and Form 10C. Understanding these provisions can help employees preserve pensionable service, make informed retirement decisions, and ensure that they receive the benefits available under the EPFO framework. Form 10C, in particular, serves as a critical tool for members seeking withdrawal benefits or safeguarding future pension entitlements under the EPS scheme.
