How to withdraw pension contribution in EPF

Priya BhadaurjaOctober 18, 2022

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How to withdraw pension contribution in EPF- The Employee Pension Scheme was created in 1995 with the main objective of giving employees in the organized sector financial security. In accordance with this plan, businesses provide their workers a certain sum of money so they may live comfortably and securely after retirement.

In order to plan for the future, it is essential to understand the specifics of your pension plan. This implies that when the time comes, you must be able to withdraw your pension contributions from the plan. Let’s study more about the plan to discover how to take a pension:

Employee Pension Scheme Eligibility Criterion

All employees who qualify for the Employees Provident Fund (EPF) plan are eligible for EPS. This program, which makes sure that workers receive a pension once they turn 58, is run by the Employees’ Provident Fund Organization (EPFO).

Let’s examine the requirements for receiving Employee Pension Scheme benefits:

The person must be a participant in the Employee Provident Fund Organization (EPFO).
To be eligible for an early pension under the Employee Pension Scheme, a person must have worked for at least 10 years and be at least 50 years old. Otherwise, 58 years of age is the legal retirement age.

If the pension is not paid for 2 years, before you reach 60, you can still get it at an increased rate of 4%.

Features of Employee Pension Scheme (EPS)

We have highlighted some essential components of the Employee Pension Scheme to better assist you understand it.

Guaranteed Returns

The profits on EPS are assured because the Indian government is backing the programme, therefore there is no risk involved in investing. There is no way to change the amount that will be given back to the pensioner.

Minimum Pension

People who take part in the EPF programme are automatically registered in the EPS programme. The person would receive a pension that is at least Rs. 1,000 each month.

Enrolment Criteria

Employees must enrol in the plan if their basic pay plus deferred allowances is Rs. 15,000 or less.

Withdrawal

Employee pension plans allow for withdrawals based on two criteria: age and years of employment. You will be able to withdraw your EPS after you turn 50. The interest rate on the money you get will be lower nevertheless.

Other Conditions

Those who are physically incapacitated in some way, whether partially or completely, are eligible for a pension whether or not they satisfy the service time requirement. Additionally, this pension starts on the day of incapacity and lasts the remainder of the beneficiary’s life.

If the widow or widower is getting an EPS payment, they will keep getting it until the deceased person passes away. The children will thereafter get the pension amount until they become 25. Additionally, if the kid has a physical disability, they are eligible to receive the pension payment until they die away. The children will be entitled to the pension if the widow or widower marries again. Children under such conditions will also be considered orphans.

How is Pension Amount Calculated Under EPS?

Understanding how the amount is determined is crucial before you can comprehend how to withdraw pension from EPS. Your pay and the number of service years you have would essentially determine how much pension you receive.

Pension contributions are made jointly by employers and workers, unlike EPF contributions, which are divided 50/50. The employer’s portion of the 12 percent only contributes 8.33 percent to the EPS plan.

This is how the pension amount is calculated:

EPS = (Pensionable Salary x Service Period) / 70.

Wherein,

Pensionable Salary

The average monthly wage received during the last 12 months prior to exiting the programme is the pensionable salary. The corporation contributes 8.33 percent of employee pay. The employer’s EPS contribution, for instance, is INR 1,250 for a basic income of INR 15,000 (15,000 * 8.33%). Additionally, non-contributory periods from the prior 12 months (if any) won’t be included. The employee will receive payment for those days.

Service Period

Based on the total time you have worked, your pensionable service is determined. Your pensionable service period is calculated by adding the total time you have worked for each employer, even if you have changed jobs. The overall duration will be rounded to the closest year if the aggregate comprises months.

When to Withdraw from the Employee Pension Scheme?

Any individual who retires after completing 58 years of employment is qualified to withdraw the full PF sum and collect the Employee Pension Scheme amount, under the Employee Provident Fund Act of 1952.

How to withdraw pension contribution in EPF?

There are two options if you want to know how to withdraw a pension contribution from your provident fund online. This is how it goes:

Using Aadhar Card

You can submit a Composite Claim Form (Aadhaar) to the EPFO office without your employer’s attesting claim when you have an Aadhaar Card. Your whole PF balance will then be credited to your bank account when you attach a voided check to the form.

Without utilizing Aadhaar Card

The second option is to provide your PF number if you do not have an Aadhaar card and are unable to have one made. You can complete the Composite Claim Form along with the PF number (Non Aadhaar). You must submit information such as your PAN (Permanent Account Number) and attach two copies of form 15G or 15H if you haven’t worked there for five years. You can submit a PF account number if you do not have a UAN (Universal Account Number).

How to Withdraw Pension Contribution from EPF?

You must adhere to the following four requirements in order to withdraw your pension contribution from EPF:

If you leave your job before finishing 10 years at that place of employment and withdrawing cash from your PF pension and employee pension scheme

If you haven’t worked there for 10 years, you can still claim your PF and EPS benefits. You only need to fill out the Composite Claim Form with “Final PF balance” and “pension withdrawal” selected. You can complete Form 10C and obtain the “scheme certificate” if you want to resume employment.

If you are leaving your job after 10 years and taking a pension from PF and the Employee Pension Scheme,

You cannot withdraw the EPS amount after working for more than ten years. To get the scheme certificate, you can submit the Composite Claim Form and Form 10C together. After you turn 58, you will start receiving a pension.

If you are between the ages of 50 and 58 and withdrawing funds from your PF pension and Employee Pension Plan

You may apply for an early pension if you are between the ages of 50 and 58 and have served ten years at your place of employment. Along with the Composite Claim Form, Form 10D must also be completed.

If, after reaching the age of 58, you are only taking off the PF pension amount, not the full pension,

It is quite easy to receive the full pension claim if you are 58. The Form 10D will be the only thing you must submit.

Select the form, then send it. You may now enjoy your PF and EPF.

List of documents which you will need to withdraw the pension contribution–

Form 19
Form 10C and Form 10D
Form 31
Two revenue stamps
Bank account statement
Identity proof
Address proof

How to Withdraw From The Employee Pension Contribution Online?

Step-by-step instruction on how to withdraw pension contributions online in order to save time and travel to an EPFO branch.

Use your UAN and secret password to log in to the UAN Member Portal.
Click the “Online Services” link in the navigation bar and then select the “Claim (Form-31, 19 & 10C)” option.
The member information will now appear on your screen. After entering your account’s last four numbers, press the “Verify” button.
To proceed after signing the certificate, click the “Yes” option.
Select “Proceed for on-line Claim” from the menu.
Select the “PF Advance (Form 31)” to make an online cash withdrawal.
You will now be prompted to select the “Purpose that advance is necessary,” the desired quantity, and the employee’s address.
Select the certification’s checkbox and submit your application.
Currently, your PAN card and two photos must be sent as scanned documents.
Your manager must now accept your withdrawal request before you may take money out of both your bank account and EPF account.
To withdraw your pension contribution online, follow these easy steps.

Who can be a member of the EPFO?

Any individual who works for pay in any capacity—manual or otherwise—in or in connection with the operations of a business covered by the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. This includes any individual employed directly or indirectly by or as a contractor in or in connection with the operations of the business.

Is it compulsory to withdraw the pension benefit along with the P.F. amount?

No. By obtaining a Scheme Certificate, an employee can withdraw his PF money while keeping a lien on the Pension Scheme.

Whether an employee already drawing Pension under EPS, 1995 is required to join the PF and Pension Fund?

Yes. He is only allowed to join the PF; he is not allowed to join the Pension Scheme.

Is withdrawal from EPS taxable?

A 10% TDS will apply to withdrawals from EPS prior to 10 years of continuous work. The amount withdrawn is taxable if the total number of years of service in the year of withdrawal is less than ten.

Online pension withdrawal is possible. Check out the online procedure below:

Visit the EPF website and log in using your credentials.
You must enter your password and UAN.
You will now see a tab labelled “Online Services”
From the menu, select the appropriate form (Form 10C or Form 10D).
Verify your information, including your job status, KYC, and member information.
Fill in your bank account’s last four digits and sign the undertaking after that.
You should tick the box next to “I want to apply for” and choose the appropriate pension withdrawal option on the following page.
Select Get Aadhaar OTP.
Click “Validate OTP and Submit Claim Form” after entering the OTP.
Once the process completed, the money will be sent to your account.

This completes the process of online EPF pension contribution withdrawal.

How long a member can retain his Provident Fund in his account?

Up until his Provident Fund dues are withdrawn, the membership may be kept. After the third year, interest will not be applied to the account if there have been no contributions to the account for longer than 3 years.

Can an employee contribute to an EPF after quitting their job?

No, This is because an employer won’t be able to pay to the Employee’s Provident Fund if there is no salary. Additionally, the company should match any contributions made by the employee.

At what age is the employee eligible for pension?

At age 58, an employee becomes eligible for a pension or superannuation. An employee may request an early pension if they depart between the ages of 50 and 57.

Can I change my age/ date of birth?

Yes, Once given, the date of birth or age cannot often be changed, however it can be modified with the right documentation. The instructions are detailed in the website’s “Change of Date of Birth for EPF & EPS members” circular, dated 03/04/2020.