EPS 95 – Should you opt for higher pension?

POSTED BY Team Jagoinvestor ON February 28, 2023 COMMENTS (12)

Some of the employees recently got a notification from their employers that they have to give a “joint declaration” if they want to opt for higher pension in EPS or not?

Let us try to clear the confusion on this.


So when a person gets a salary, there is a component called basic salary in their salary. 12% of that is contributed by employee end and 12% of that is matched by the employer.

However the 12% part which employer provides is further divided into 8.33% and 3.67%. The 8.33% part actually goes into something called EPS (Employee pension scheme) and rest goes into EPF. However the EPS part is limited to maximum of 8.33% of 15,000 which is considered as the ceiling for basic salary, due to which what happened is that a very small portion of money went into EPS and big part went to EPF.

Over the years, people were dissatisfied that pension portion is not matching their high salary which results to a very tiny pension amount does not makes sense.

Hence recently supreme court has given the order that all the eligible members (who were part of EPFO scheme before 2014) shall get a chance to correct this and some part of their EPF can be transferred to EPS which will result in higher pension.

We have created a small video presentation to make you understand this topic in detail , so please watch the video below.

5 reasons why you shall NOT opt for higher pension in EPS-95

  • If you want to get a higher lumpsum payout at the time of your retirement
  • if you don’t like EPFO as an organization and want to not engage with them post retirement
  • If you are someone who wants to retire early in life
  • If your salary can reduce in later years of your career
  • If you have already shifted many jobs and not transferred your earliar EPF accounts into current one’s


In the last I just want to include that if you want flexibility and want a bigger corpus then don’t opt for higher pension scheme. But if you are someone looking for fixed and guaranteed and you are comfortable with lower corpus at the time of retirement then you can think of moving into higher pension scheme.

12 replies on this article “EPS 95 – Should you opt for higher pension?”

  1. Pranesh says:

    Very informative. Thanks for sharing. The video explained in very well with examples.

  2. Vijay says:

    Very informative article. Ideally, i would like to know how much they will take from my PF kitty to get this new higher pension. Then only we can take an informed decision whether to opt or not to opt for this new pension scheme.

    1. Jagoinvestor says:

      That calculation is going to be a bit complex and is not available !

  3. Abdul Sattar says:

    Just after opting for higher pension , if the pensioner and his spouse dies , then what will happen to the corpus which the pensioner has paid from EPF , is it refundable to the nominees of the pentioner , please reply ,
    In my view higher pension is a jumlaa pension

    1. Jagoinvestor says:

      There is no corpus. The deal is simple.. you get the pension till you dont die .. Simple ..

      You are taking the worst case, ask what happens if you live till 100? You keep getting the pension


  4. R R Pandey says:

    I am going to reire 31 st dec 2023. My basic is 79,000 thosand.
    Should I take, I am not able to understad

    1. Jagoinvestor says:

      You can take it if you are govt employee.. Did you check the video?

  5. Bhushan says:

    Do NOT trust EPFO/EPS. It took me 3 years and dozens of follow ups with EPFO to get my scheme certificate. Everytime they were giving various excuses or ‘missing info’ and used to return my file. When I got it after 3 years, my employer was surprised as he had 100s of cases with many over 10 years which were still pending. Employees were too tired (over 60 years of age) to even have energy to follow up.
    As mildly pointed out in this article, if you want your money quickly, stay with PF. Do NOT move money to EPFO/EPS.
    Also note that, if you switch now, your previous PF contribution and their compounded interest will be reduced. This will be a substantial amount.

    1. Jagoinvestor says:

      Yes.. thanks for sharing this experience

  6. Sreenivasa Murthy says:

    Thank you for posting this. Useful info and video. On the pension calculation, you said it is 12 months average salary (old option) OR average of last 5 years salary. I assume it is basic salary NOT Gross salary or overall salary. All calculations are based on basic salary only. Gross salary is always higher than base salary as it includes other variable components.

    1. Jagoinvestor says:

      Yes, its always basic salary!

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