EMPLOYEES’ PENSION SCHEME – 1995

  Employees' Pension Scheme-95 came into effect from 16.11.95. The Employees' Pension Scheme-95 has been conceived as a Benefit defined Social Insurance Scheme formulated following actuarial principles for ensuring long term financial sustenance. The new Employees’ Pension Scheme-95, repealed and replaced the erstwhile Family Pension Scheme, 1971. The assets and liabilities of the erstwhile Pension Fund were transferred and merged with the new Pension Fund.  The benefits and entitlements to the members under the old scheme remain protected and continued under the new Employees’ Pension Scheme-95.  

APPLICATION AND COVERAGE

The Scheme was notified on 16.11.95 and made effective from that date with the provision for retrospective application from 1.4.93 in selective cases. The Scheme on its introduction applied on compulsory basis to all the new members of Provident Fund and the existing members who were contributing to the Employees' Family Pension Scheme-1971. The existing members (as on 16.11.95) of the Provident Fund who did not opt for joining the erstwhile Employees' Family Pension Scheme-1971 and the beneficiaries under the erstwhile Employees' Family Pension Scheme-1971 in case of death/exit occurring between 1.4.93 and 15.11.95 have option to join the new scheme.

 CONTRIBUTION

No separate contribution is payable additionally by the member for the Pension Scheme benefits.  The new Pension Scheme, alike the old Employees' Family Pension Scheme, 1971 derives its financial resource by partial diversion from the Provident Fund contribution, the rate being 8.33% in lieu of 2.33% against the old ceased Family Pension Scheme-1971.The Central Government continues contributing at the rate of 1.16% as before, on wages at the end of the year.  

BENEFITS

Newly introduced Employees' Pension Scheme-95 provides for following benefit package:

1. Pension for life to the member, on superannuation/retirement and invalidation.

2. To the members of the family upon death of the member:

1. Pension to Widow/Widower for life or till re-marriage.

2. To children/orphan, two at a time additionally upto 25 years of age simultaneously with widow/widower pension.

3. Children/orphan with total and permanent disability shall be entitled to payment of children pension or orphan pension as the case may be irrespective of age and number of children in the family.

4. Facility for payment of pension to nominee in the event of member who is unmarried or without any eligible family member to receive pension, and

5. Facility for payment of pension to dependent father/mother in the event the member dies leaving behind no eligible family members and no nomination by such deceased member exist.

3. Facility for capital return (corpus accretion) on option formula basis

4. Commutation of pension up to 1/3^rd of pension amount

5. Scheme Certificate to retain membership of the Scheme till attaining the age of 58 years. 

Superannuation/retirement pension under the new scheme will be payable on fulfilling:-

1. Minimum 10 years eligible service and

2. Attaining age of 58 years.

On ceasing employment earlier than 58 years, pension may be availed of by a member at his option, before attaining the age of 58 years but not below 50 years. Such early pension will be subject to discounting factor. However, no such age restriction or eligibility requirement shall apply for pension entitlement on disablement or pension payable to the family members on death of the member. Membership with one contribution is enough in such cases. 

VALUATION OF PENSION FUND

The Pension Fund is evaluated by an Actuary on an annual basis. Based on valuation recommendations, Central Government determines the amount of relief on pensions to existing pensioners.

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