EPFO Pension: When most people hear the name Employees’ Provident Fund Organization ( EPFO ), they think of the money they’ll receive after retirement. However, few understand that EPFO is not just a retirement savings scheme; it also provides pension benefits through the Employee Pension Scheme (EPS). However, its rules can seem a bit complicated, especially when it comes to early retirement, job loss, or pension eligibility. So, let’s explain how you can get your pension if you need it before retirement.
When and how do you get early pension?
According to EPFO rules, any member can begin receiving a pension after the age of 50. However, if you choose to begin receiving a pension before the age of 58, you will face a 4% pension reduction every year. If you choose to begin receiving a pension at the age of 55, your pension will be reduced by 12%. However, if you begin receiving a pension at the age of 52, this reduction increases to 24%. However, if you are under 50, you will not receive any pension.
What happens if you lose your job before the age of 50?
If, for some reason, you leave your job before the age of 50, you won’t receive your pension immediately. Your pension fund will remain intact, and you’ll begin receiving your pension when you reach age 58. This means your money won’t go to waste; you’ll just have to wait until the specified age to receive.
According to EPFO rules, an employee is eligible for a pension only after completing at least 10 years of service. If you have worked for 10 years or more and contributed to EPF, you can receive a pension at age 58.
If you’ve worked for less than 10 years, you can withdraw your pension funds. However, once you’ve worked for 10 years or more, EPS funds can no longer be withdrawn. After this, you’re only entitled to a monthly pension, which begins after you reach the age of 58.
Why is EPS Pension Certificate necessary?
A pension certificate is essential for EPS members. This certificate proves that you have contributed to the pension scheme. If you change jobs, this certificate can be used to transfer your pension account to the new company. However, if you have contributed for less than 10 years, a pension certificate is not required.
If you are an EPFO member and are planning your future pension, it is crucial to understand its rules. According to EPFO rules, early pension can only be taken after reaching the age of 50. If a person wishes to withdraw pension before the age of 58, a 4% deduction is made for each year of withdrawal. This means that the earlier you withdraw your pension, the lower the amount. It is necessary to have worked for at least 10 years to be eligible for pension. If your service period is less than 10 years, you can withdraw your EPS amount.
Even if you change jobs or take a break, there’s no need to worry, as your pension funds are safe. Just make sure your Universal Account Number (UAN) and pension certificate are always updated. This will prevent future problems and allow you to easily access your pension.
