My first employer was not making any contribution to EPS, but my 2nd employer started. Now I have changed the organization, and my 3rd employer is not contributing to EPFO. Do I need to opt out of EPS or continue as my 2nd employer started EPS even though, in all cases, my basic salary is more than 15000?
From India, Hyderabad
From India, Hyderabad
Opting out of EPS will depend not only on the salary but on the date of joining the Fund. If your first employment was after 1st Sept 2014 and the PF qualifying salary at the time of joining the first organisation was above Rs 15000, then your opting out of EPS was right. Actually it is not opting out but you should have excluded from EPS. Now, the second company has contributed to EPS either by mistake or due to lack of knowledge of the law. They should not have contributed to EPS but should have contributed their share exclusively to EPF without bifurcating it as 8.33% to EPS and the remaining 3.67% to EPF. Now when you join a third company you should tell the Personnel Officer that you are an existing member of EPF and no way you could be excluded from PF. Naturally, if the third company is having less than 20 employees, that establishment will not have PF registration. In such cases, you will have to wait till the establishment gets coverage first and then to get you covered by EPF.
Before that you have to get the contributions made by the second company corrected. Otherwise, when you go for withdrawal of PF, or transfer the PF, the system will reject it saying that your first company did not contribute to EPS or the second company did contribute to EPS etc. Now a days the main objective of EPFO is rejection of claims. Therefore, you have to correct the second company's contributions and divert the funds from EPS to EPF. It is just a reconciliation and transfer of funds for the EPFO but they will not do it by themselves until the member walks in every day and remind them of their duties!!
From India, Kannur
4249Before that you have to get the contributions made by the second company corrected. Otherwise, when you go for withdrawal of PF, or transfer the PF, the system will reject it saying that your first company did not contribute to EPS or the second company did contribute to EPS etc. Now a days the main objective of EPFO is rejection of claims. Therefore, you have to correct the second company's contributions and divert the funds from EPS to EPF. It is just a reconciliation and transfer of funds for the EPFO but they will not do it by themselves until the member walks in every day and remind them of their duties!!
From India, Kannur
Thanks Madhu. T.K for such a clear answer. One doubt, my 3rd organisation is having more than 20 employees and they do contribute to EPS for other employees, but I am not sure why in my case they contributed whole money to employer PF.
Also, please correct me, is my 3rd employer right ? and he should not be contributing to EPS. Instead I should ask my 2nd employer to correct this mistake.
Fyi, my joining date in first company was in 2018
From India, Hyderabad
Also, please correct me, is my 3rd employer right ? and he should not be contributing to EPS. Instead I should ask my 2nd employer to correct this mistake.
Fyi, my joining date in first company was in 2018
From India, Hyderabad
Once you're enrolled in EPS, you generally stay enrolled until you're no longer eligible (reach retirement age or leave the workforce permanently). There's usually no need to opt out.
Employer contribution determines account: However, your employer's contribution decides which account receives the 8.33% contribution meant for pension.
Salary below Rs. 15,000: If your basic salary is less than Rs. 15,000 per month, the entire 8.33% goes to EPS.
Use the Unified Account Number (UAN) portal to verify your EPS account status and uno online contributions. This will give you a clearer picture.
From United States, Phoenix
Employer contribution determines account: However, your employer's contribution decides which account receives the 8.33% contribution meant for pension.
Salary below Rs. 15,000: If your basic salary is less than Rs. 15,000 per month, the entire 8.33% goes to EPS.
Use the Unified Account Number (UAN) portal to verify your EPS account status and uno online contributions. This will give you a clearer picture.
From United States, Phoenix
Your third organisation should have contributed the entire contribution payable by the employer to EPF because your date of joining the fund is after September 2014. If you had declared that you were not covered by EPS in form 11, then they (third company) would not have covered you under EPS also. Now, the things is like this, I guess:
1. Your date of joining the EPF for the first time is in 2018
2. Your basic salary on which PF was deducted was above Rs 15000 when you joined the 1st Company 3. Therefore, they put the entire contribution payable in EPF without bifurcating it as 8.33% to EPS and 3.67% to EPF. That was what is expected also.
4. Your 2nd Company contributed to EPS also. Now you are a member of EPS. But actually you are not entitled to be covered by EPS.
5. Your 3rd Company started PF, and they contributed the entire 12% to EPF. This is right because you are not entitled to become a pension fund member by law. Therefore, you have to correct the contribution made by the 2nd Company, make it diverted to EPF. For that contact the 2nd Company and do the needful. Nothing else could work out.
From India, Kannur
1. Your date of joining the EPF for the first time is in 2018
2. Your basic salary on which PF was deducted was above Rs 15000 when you joined the 1st Company 3. Therefore, they put the entire contribution payable in EPF without bifurcating it as 8.33% to EPS and 3.67% to EPF. That was what is expected also.
4. Your 2nd Company contributed to EPS also. Now you are a member of EPS. But actually you are not entitled to be covered by EPS.
5. Your 3rd Company started PF, and they contributed the entire 12% to EPF. This is right because you are not entitled to become a pension fund member by law. Therefore, you have to correct the contribution made by the 2nd Company, make it diverted to EPF. For that contact the 2nd Company and do the needful. Nothing else could work out.
From India, Kannur
Employees earning a base salary plus DA of Rs.15,000 or less are required to enroll in the scheme. You will be able to withdraw the EPS once you attain the age of 50 years. However, the amount that you receive will be at a reduced rate of interest.
Can EPS be withdrawn fully?
Ans: One cannot withdraw full pension amount while still working. An employee can make withdrawals only when they have been unemployed for a minimum of 2 months (also, the employment tenure should be less than 10 years and more than 6 months).
It's to be examined in the light of recent SC's judgment on capping the salary, if got some impact on this case (relevant FAQs is attached), I'm not sure if it helps..
For clarity of understanding EPF/EPS needy may browse these links :
https://www.policybazaar.com/life-insurance/pension-plans/articles/employee-pension-scheme-eps/
https://www.epfindia.gov.in/site_en/FAQ.php
From India, Bangalore
Can EPS be withdrawn fully?
Ans: One cannot withdraw full pension amount while still working. An employee can make withdrawals only when they have been unemployed for a minimum of 2 months (also, the employment tenure should be less than 10 years and more than 6 months).
It's to be examined in the light of recent SC's judgment on capping the salary, if got some impact on this case (relevant FAQs is attached), I'm not sure if it helps..
For clarity of understanding EPF/EPS needy may browse these links :
https://www.policybazaar.com/life-insurance/pension-plans/articles/employee-pension-scheme-eps/
https://www.epfindia.gov.in/site_en/FAQ.php
From India, Bangalore
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