Employee Pension Scheme is a defined benefit scheme where monthly pensions are paid to the members after they retire In case of the death of the member, pension is paid to the widow and children. The scheme commenced on November 1995 and replaced the Family Pension Scheme, 1971

The scheme currently applies to all establishments engaged in 182 specified industries , employing at least 20 people. Once an establishment is covered, it remains covered even if the number of employees fall below 20. The scheme is mandatory only for employees earning a monthly salary up to Rs. 6,500, where salary includes basic wage,with dearness allowances, retaining allowance and cash value of food concessions. However employers usually extend it to all employees. The EPS coverage has been steadily increasing, with a membership of 2,55,72,161 people as of March 2003.