Can Employee Pension Savings (EPS) Be Transferred with an EPF Transfer? Understanding EPS Rules and the Process

When an employee changes jobs, one of the questions that often arise is whether their Employee Pension Scheme (EPS) contributions will be transferred to their new employer. In this article, we will explore the complexities of EPS transfers, the role of the Employees’ Provident Fund Organization (EPFO), and the steps employees can take to ensure they receive their rightful pension benefits.

EPS Transfer: Myth or Reality?

The simple answer is that EPS contributions are not automatically transferred when you transfer your Employee Provident Fund (EPF) account to a new employer or company. This may seem a bit counterintuitive, but it is important to understand the underlying rules and procedures. The EPS is a separate scheme from the EPF, and its rules differ significantly in terms of how contributions and benefits are handled.

Overview of EPS and EPF Schemes

The EPS is a supplementary pension scheme that aims to provide employees with additional pension benefits upon retirement. Unlike the EPF, which is a compulsion and mandates a certain contribution from both the employee and the employer, the EPS is optional and involves an additional contribution that the employee voluntarily makes towards their retirement fund.

EPS Contribution and Transfer

When you transfer your EPF account to a new employer, your service years to the EPS are not transferred automatically. Instead, your EPS pension is dependent on the number of years you contributed to the EPS. To know your contribution details, you can view the Service Details on the Unique Account Number (UAN) site. However, for a more detailed record, you can request Annexure K by raising a grievance with EPFO.

But here’s the good news: when changes in employment occur, your EPS service years and pension benefits are transferred to your new EPS account. Your pension calculation will be based on your service years and the basic salary, thereby ensuring that your future pension is calculated accurately as per the rules.

Gotchas in EPS Transfer Process

Given the complexities, understand that if you raise a grievance concerning the transfer of EPS service years, the EPFO might respond by noting that the transfer is only based on the EPS service years with the current EPFO. This means that only the contribution with the EPFO is considered, but your pension benefits will be calculated based on the service years and exit wages.

Rules and Exceptions for EPS Withdrawal

According to EPS rules, if a member has not rendered at least 10 years of eligible service by the date of exit or by the age of 58, whichever comes earlier, they will be entitled to withdraw the benefit based on Table D or may opt to receive the scheme certificate. It is always recommended to opt for the scheme certificate to avoid losing your hard-earned contributions. Possessing a scheme certificate will make it easier to collect the pension benefits once you reach the age of 58.

What to Do When Transferring Employment

When changing jobs, it is crucial to understand the process for transferring your EPS and EPF accounts. Here are some steps you can take to ensure a smooth transition:

Log in to your UAN for a clear view of your EPF service Annexure K for a detailed record of your EPS your new employer to continue your EPF and EPS accounts.Ensure that your new employer applies the correct contribution all necessary documents and records for future reference.

Conclusion

To summarize, while EPS contributions are not automatically transferred when you change jobs, your EPS service years and the associated benefits will be transferred to your new EPS account. The pension calculation will be based on these service years and your basic salary. For detailed records and to avoid any discrepancies, it is advisable to contact the EPFO and request Annexure K. Understanding these nuances and following the outlined steps will help you manage your EPS contributions effectively and ensure that you receive the pension benefits you deserve.