When Payment of Pension To EPS '95 Pensioners’ Account Is Credited?

The Employees' Provident Fund Organisation (EPFO) has recently clarified the issue of pension payments to pensioners not being deposited in their accounts on the due date, causing Employees' Pension Scheme (EPS) pensioners to experience hardships. Owing to the same, EPFO has made a clarification in a circular dated 13.01.2022 by saying that "The matter has been reviewed by Pension Division and keeping in line with RBI instructions, it has been decided that all field offices may send the monthly BRS to banks in such a way that pension gets credited to pensioners account on or before last working day of the month (except for the month of March that shall continue to be credited on or after 1st April). Further, it may simultaneously be ensured that actual pension is sent to pension disbursing banks not earlier than two days before it is to be credited in pensioners' accounts."

EPFO has further clarified that all offices are instructed to issue necessary instructions/guidelines to pension disbursing banks within their respective jurisdiction in order to guarantee a smooth execution of the pension payment rule.

Employees' Pension Scheme (EPS) is a government initiative run by the Employees' Provident Fund Organisation (EPFO). EPS is available to all employees who are entitled to contribute to their PF. Employees earning a basic salary plus DA of Rs.15,000 or less are required to register for EPS and the scheme's benefits are only available if the employee has worked for the company for at least ten years.

Under EPS, both the employer and the employee contribute 12% of the employee's basic salary to the EPF. Each month, the employee's full share is contributed to EPF, 8.33 percent of the employer's contribution is contributed to the Employees' Pension Scheme (EPS), and 3.67 percent is contributed to EPF.

When an employee reaches the age of 58 and must have served for at least ten years he or she becomes eligible for pension benefits of EPS. If the member is unable to remain employed for ten years before reaching the age of 58, he can withdraw the entire sum at the age of 58 by submitting Form 10C. In his or her EPF passbook, a member can check the amount deposited in the Employees' Pension Scheme (EPS) account. The passbook reflects the EPS contribution made by the employer into the member's account each month.

The Reserve Bank of India (RBI) releases instructions/guidelines to the pension disbursing agencies on a regular basis for crediting pensions by the pension disbursing banks. According to FAQs of RBI "pension paying banks should compensate the pensioner for delay in crediting pension/ arrears thereof at a fixed interest rate of 8 per cent per annum for the delay after the due date of payment. This compensation should be credited to the pensioner's account automatically without any claim from the pensioner on the same day when the bank affords credit for revised pension/ pension arrears, in respect of all delayed pension payments made since October 1, 2008."