InvestorQ : What is the reduction in pension amount a member gets from the Employee Pension Scheme (EPS) if he/she retires before the age of 58?
Isha Tharwani made post

What is the reduction in pension amount a member gets from the Employee Pension Scheme (EPS) if he/she retires before the age of 58?

Answer
user profile image
Anusha Savla answered.
1 year ago


The Employees’ Pension Scheme (EPS) is a social security scheme provided by the Employees Provident Fund Organisation (EPFO) to build a retirement corpus for an individual.

The EPS makes provisions for employees working in the organized sector for a pension after their retirement at the age of 58 years.

Any member of the EPFO can withdraw an early pension if he has completed 10 years of service and has reached the age of 50 years but is less than 58 years. In this case, the pension amount is slashed at a rate of 4% for every year the age is less than 58 years.

Thus, if a member decides to withdraw the monthly reduced pension at the age of 56 years, he will get the pension at a rate of 92% (100% – 2 x4) of the original pension amount.