Aadhaar now vital for Employees

Pension Scheme subscribers

Shaikh Zoaib Saleem
http://www.livemint.com/

The government does not make this contribution if the subscribers

salary is over Rs15,000

In effect, the government has made it mandatory for salaried individ-

uals, who are part of the Employees Provident Fund (EPF), to get
Aadhaar authentication done in order to get the government benefit
under the Employees Pension Scheme (EPS). The government con-
tributes 1.16% of an EPF subscribers salary, which is considered to a
maximum of up to Rs6,500.

The government does not make this contribution if the subscribers

salary is over Rs15,000. As per the latest notification, this amount
will not be credited till the Aadhaar number is shared with the
Employees Provident Fund Organisation (EPFO).

Those without an Aadhaar number will have to make an application

to get enrolled by 31 January 2017, the notification said.

Members and pensioners of the Employees Pension Scheme, desir-

ous of continuing to avail pension and membership to the Employees
Pension Scheme by availing the central governments contribution
and subsidy under the said scheme, are hereby required to furnish
proof of the possession of the Aadhaar number or undergo Aadhaar
authentication, the notification said.

Until a subscriber enrols for Aadhaar, the governments contribution

under the scheme will be made only after a copy of the request made
for Aadhaar enrolment is submitted to the EPFO.

What is EPS?

If you are a salaried individual, a part of your EPF money goes

towards EPS. Enrolment to the EPF automatically makes you a mem-
ber of the EPS as well.

Every month, you contribute 12% of your (basic) salary in the EPF
account, and your employer contributes an equal amount. But 8.33%
of that goes into EPS.

Typically, the employer calculates this contribution on the capped

wage, which is currently Rs15,000 per month. So, even if you are
earning more than Rs15,000, the employer would contribute 8.33% of
this amount (Rs1,250) to the EPS.

The balance is invested in your EPF account. While the contributions

to the EPF get an interest as notified by the government from time to
time, the contributions towards EPS do not earn any interest.

At present, the minimum pension under EPS is Rs 1,000 per month

and an employee can receive the pension only after a minimum 10
years of service and attaining the age of 58 years.
Pension after voluntary retirement can also be sought after the age of
50 years.

The benefits of Aadhaar for EPS

The notification issued by the Ministry of Labour and Employment,

dated 4 January, states that the use of Aadhaar as identity document
for delivery of services, benefits or subsidies simplifies the govern-
ments delivery processes. ...(it) brings in transparency and effi-
ciency, and enables beneficiaries to get their entitlements directly in
a convenient and seamless manner and Aadhaar obviates the need for
producing multiple documents to prove ones identity, the notifica-
tion said.

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