Employee Pension Scheme (EPS) is a kind of retirement scheme, in which employees have to deposit a fixed amount per month. In this way, after completing 60 years, on retirement, a fixed amount is given to the person every month as a pension. All the employees doing jobs have many questions in their minds about PF (Provident Fund – PF).
How much pension will be received from EPFO (Employees’ Provident Fund Organisation) after retirement? Many such questions often cause curiosity in people. But today we are going to tell you what happens when the employee who withdraws PF retires. So let’s know about it in detail! This information is extremely important for your future financial security.
Will those who withdraw money also get a pension on retirement
If you also have this question about PF, then let us tell you that the answer is yes. The employees who come under the purview of the Provident Fund Organization (EPFO) and withdraw money from PF, also get pension on retirement. However, for this, the employee has to work for at least 10 years. For information, let us tell you that if you have contributed regularly to PF, then you are entitled to get pension after retirement. Even if you have withdrawn some amount from PF in between. This is relieving news for your future.
Know the deduction rules
Every month 12 percent of the basic salary has to be deposited in EPFO. Out of this, 8.3 percent is deposited in the PF account and 3.67 percent in the EPF scheme. Let us tell you that the amount deposited in the EPF scheme is given as pension after maturity. If a person is 50 years old, then he can claim for pension as an EPF account holder.
In such a situation, if a person claims a pension before 58 years of age, then there will be a deduction of 4 percent every year. After retirement, 75 percent of the amount deposited in the EPF fund is received as a lump sum. At the same time, 25% of the amount is received as a pension every month. Talking about the calculation of pension, there is a formula to calculate it and that is – Average Salary x Pensionable Service / 70. Knowing this will help plan your pension.
Eligible to get pension after working for 10 years
If the employee contributes to EPFO every month, then he is considered eligible to get pension after working for 10 years. However, the prescribed age to get pension is 58 years, but in any case, if the employee wants, he can take pension even after 50 years. If he claims for pension before the completion of time or after the age of 50, then he gets pension with deduction. This rule is important for those who are planning for early retirement.