Why errors in your EPS can hit your retirement income

Subscribers of the Employees’ Provident Fund (EPF) diligently track the steadily rising balance in their EPF passbook: the combined pool of their own 12% contribution, a part of the employer’s share (3.67%) and the accumulated interest. But its quieter counterpart, the Employees’ Pension Scheme (EPS), rarely gets the same attention. That neglect may prove costly.

For eligible members, 8.33% of the employer’s contribution is compulsorily diverted to EPS, subject to a wage ceiling. A pension becomes payable at age 58, after 10 years of contributory service is complete. Unlike EPF, however, EPS does not build a visible corpus and cannot be withdrawn as a lump sum. Its low visibility means most employees seldom scan their passbook for EPS entries, allowing errors to slip by that later may lead to serious consequences.