10.32.1.30 Social Security System in India

India's social security system

The Indian social security system includes the Employees' Provident Fund Scheme (1952), the Employees' Pension Scheme (1995) and the Employees' Deposit-Linked Insurance Scheme (1976) which are covered by the Employees' Provident Funds and Miscellaneous Provisions Act 1952. These schemes are covered by the Agreement.

The employee pays 12% of basic wages into the Employees' Provident Fund (no employee contributions are required for the Employees'; Pension Scheme) and the Employer pays 12.5% of basic wages (8.33% into the Pension Fund, 3.67% to the Provident Fund and 0.51% to the Deposit-Linked Insurance Scheme). The Government contributes 1.17% of the basic wage to the Pension Scheme.

The Employees' Pension Scheme (ESP) is both a defined contribution and defined benefit scheme which provides pension payments for life on retirement and on disablement during employment. It also provides social security cover to the family of the insured in the event of death.

The ESP provides the following Indian benefits:

  • Pension for life to the member, on retirement or disablement during employment.
  • Pensions to members of the family upon death of the member:
    • to widow/widower for life or until re-marriage,
    • to children/orphans, up to 2 children younger than 25 years of age simultaneously with widow/widower pension,
    • to children/orphans with total and permanent disability irrespective of age and number of children in the family,
    • to a nominee in the event of member who is unmarried or without any eligible family member to receive pension, and
    • to a dependent father/mother in the event the member dies leaving behind no eligible family members and no named survivor.

The Employees' Provident Fund provides an individual account based lump sum (accumulations plus interest) on retirement at 58 years of age, permanent disablement or death. Partial withdrawals/advances are available in certain contingencies. (Full withdrawal at 55 years of age is possible if the member is retired.)

The Employees' Deposit Linked Insurance Scheme (EDLI) provides a survivor benefit up to a maximum amount and is subject to certain conditions.

Old Age (retirement) pension

Old Age pension is paid if the member has a minimum of 10 years eligible service and has reached 58 years of age (no pension is payable for lesser periods). Twenty years of contributions is required for a full pension.

Disability pension & survivors' benefits

Membership with at least one month of contributions is enough to qualify for disability or survivor benefits.

Last reviewed: 4 January 2016