EPFO Pension: Does a private employee's wife receive a pension after his death? This is how much money is deposited into the account..

EPFO Pension: Private sector employees receive a pension under EPFO's EPS scheme. This scheme was specifically designed for employees working in the private sector. If you also work in the private sector, you will receive a pension under this scheme after retirement. Currently, the amount of pension received under this scheme is very low. However, discussions are underway to increase it. However, the government, in response to a question in the winter session of Parliament, stated that there are currently no plans to increase it.

Sooner or later, the pension received under the EPFO's EPS scheme will be increased. Currently, the minimum pension under this scheme is Rs. 1000. A member of the Employee Pension Scheme (EPS) becomes entitled to a lifelong pension after completing 10 years of active contribution under the EPS. However, the pension usually starts when the member reaches 58 years of age or the applicable retirement age in the respective organization. But what happens if the member dies before retirement? Will the spouse receive a lump sum amount, or will the spouse have to wait until the deceased pensioner's retirement year to receive the pension? Let's find out.

Money is deposited into the pension fund every month
Every month, your employer deducts 12 percent of your basic salary (and dearness allowance, if any) and deposits the same amount along with their contribution into your Employee Provident Fund (EPF) account. The amount accumulated from these regular contributions is given to you as a lump sum at the time of retirement.

Out of the employer's 12 percent contribution to the basic salary, 8.33 percent goes to the Employee Pension Scheme (EPS), which acts like a pool from which you receive a regular income for life.

However, for this calculation, the basic salary is capped at Rs. 15,000 (meaning Rs. 1,250 goes into your EPS), unless you opted for a higher pension based on your actual basic salary last year. After completing at least 10 years as an EPS member, you become eligible for a pension. Upon retirement, you will start receiving a pension calculated according to the formula: [Pension = (Pensionable Salary (i.e., average of the last 60 months) x Pensionable Service) / 70)].

Will the wife receive a pension if the employee dies?
Even if a member is eligible for a pension after completing 10 years of service, the pension only starts after retirement. This is typically at the age of 58 if the member is alive. As EPF and EPS contributions run concurrently, if an employed member dies before the retirement age and there is a balance in the EPF account, the spouse will receive the entire balance in the provident fund account as a lump-sum payment.

Even if the EPS member has contributed to the pension fund only once before death, the family will receive a pension. If the employee dies while in service, the minimum guaranteed pension payable to the spouse will be Rs 1,000 per month.

The next question is when the spouse will start receiving the pension, and whether they have to wait until the deceased EPS member's retirement age. There is no need to wait until the deceased pensioner's retirement year to receive the pension. The spouse's eligibility for the pension will begin from the date of the pensioner's death.

Under the Employees' Pension Scheme, 1995, not only the member employee but also family members – primarily the spouse and children – are entitled to a pension in the event of the member's death before or after retirement.

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