New Delhi: Not many subscribers of the Employees’ Provident Fund Organisation (EPFO) are aware of the fact that they could be eligible for pension at the time of retirement. EPFO provides a pension scheme for subscribers which ensures that employees receive a pension once they attain the age of 58 years old. Existing, as well as new EPF members, can avail the benefits of this scheme.
The employee and employer each contribute 12% of the employee’s basic salary and Dearness Allowance (DA) towards EPF. While the entire share of the employee is contributed towards EPF, 8.33% of the employer’s share goes towards this pension scheme. The scheme acts as a regular source of income after the employee retires. However, you need to know that to avail the benefits of this scheme, you need to get a Scheme Certificate at the right time.
Your employer contributes 8.33% of your basic salary and dearness allowance (DA) to employees’ pension scheme (EPS), as part of EPFO contribution. However, there is a maximum cap of Rs 1,250. The amount of pension you receive is calculated by multiplying pensionable salary (average of last 60 months) with pensionable service and then dividing the figure by 70. The minimum pension that you get under the scheme is Rs 1,000.
According to the official website, you are eligible for pension on superannuation at the age of 58 years. If you quit your job between 50 and 57 years, you can avail an early but reduced pension. However, if you continue to work and contribute to EPF even after 58 years, you can avail pension from the age of 58.
Note that PF contributors who have contributed to EPF for less than ten years get an option at the age of 58 to either withdraw the amount or get a pension. On the death of the EPF subscriber, the pension is automatically payable to the spouse. According to EPFO rules, if you have worked for less than 6 months, then you would not be able to withdraw the pension amount.
The scheme certificate is like a policy for pension as it facilitates the transfer of pension accounts when you change jobs. In order to claim your pension, need to have this certificate. PF subscribers who have contributed for at least 10 years and are below the age of 58 will be mandatorily issued scheme certificate for getting the pension.
For those, whose contribution period is below 10 years, they can avail the certificate to carry forward the pension service but it is not mandatory. If the holder of the scheme certificate dies, the family will get a pension.
It is worth mentioning that while switching jobs, PF subscribers should transfer their service to the new establishment on the EPFO portal. In case the new establishment is not under EPF, then they can take a scheme certificate for availing pension later on. People who have already contributed to EPF for 10 years and do not intend to work further, they can get a scheme certificate to avail pension at the age of 50 to 58 years. You need to fill Form 10C for claiming withdrawal benefit and scheme certificate.