By a notification dated 05 October 2012, the Ministry of Labour of Employment has introduced sub-paragraph 4A to paragraph 43-A of the Employees Pension Scheme, 1952 (EPS) which deals specifically with international workers. Under the EPS, an employee is eligible for pension upon his retirement, if the employee has rendered the minimum eligible service of 10 years.
By virtue of this notification, the Ministry has clarified that in respect of an international worker from a country with which India has executed an SSA, eligibility for pension is determined on the total number of years of service rendered by the international worker under the social security programme of his home country and the number of years of service rendered in India in an establishment covered under the EPS. For example, if an employee has been employed in his home country for a period of 20 years and in India for a period of 7 years, the employee’s eligible service in India would be considered as 27 years and he would be eligible for pension.
However, it is relevant to note that the calculation of pension is made only on the number of years during which contributions were made under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (EPF Act). In the example above, the international worker’s pension would be calculated on the 7 years during which contributions were made on his behalf under the EPF Act.
Further, the SSAs executed with Belgium, South Korea, Luxembourg, France and Denmark already contain provisions on calculation of eligible service for pension on the basis of the total number of years of service in the home country as well as India. Therefore, this notification will specifically benefit international workers from Germany, Switzerland and Netherlands who will now be eligible to pension benefits in India if the total number of years of service rendered by them at their home country and in India is more than 10.