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Understanding Pension Withdrawal: A Guide to Making Informed Decisions

In 1995, the Indian government announced the Employee Pension Scheme to offer social security and pension benefits to workers in the organized sector. The programme is administered by the Employee Provident Fund Organisation (EPFO), and it is open to all employees who qualify for the Employee Provident Fund. Knowing how the pension is withdrawn is crucial since the EPS contributes to a reliable income after retirement.

  • Who May Withdraw Contributions from the EPF?

EPF contributions amount to 12% of an employee’s dearness allowance and base pay. The employer also makes a contribution in equal measure. Despite the fact that employees typically withdraw their corpus after retirement, they still have the ability to do so in an emergency.

  • The following are the requirements for pension withdrawal:
  • An employee is permitted to withdraw 90% of their corpus prior to one year of retirement.
  • Upon returning to work after a month of unemployment, the employee may withdraw 75% of the corpus; the remaining corpus will be transferred to the new EPF post.
  • Employees must have an active UAN and have their bank information, including AADHAR and PAN, linked to that UAN.
  • Required Documents for EPF Withdrawal:

One must submit the relevant documentation in order to withdraw EPF:

  • A certified copy of the applicant’s KYC records, which may be an Aadhar card, voter ID, passport, or driver’s license.
  • Any document that can be utilized to confirm the applicant’s bank account information, such as a voided cheque, an updated bank passbook, or other supporting documentation.
  • If an employee withdraws their EPF before five years of continuous work, they must submit ITR Forms 2 and 3.
  • If one decides to receive the money in their bank account, a bank account statement with revenue stamps will be required.
  • A completed EPF claim form.
  • How Can PF Contribution Be Withdrawn?

The following are the two options for withdrawing your EPF pension:

  • Using the Aadhaar card, PF pension withdrawals can be made:
  • Go to the EPFO website and activate your Universal Aadhaar Number first.
  • Fill down the Aadhaar and bank information on the portal following activation.
  • Provide the employer with accurate information on Form 11.
  • After that, deliver the composite claim form and a voided cheque to the EPFO office.
  • Withdrawal of PF benefits without using an Aadhaar card
  • You must fill out and attach two copies of Form 15G or Form 15H in order to withdraw pension benefits without an Aadhaar card.
  • You must supply your PAN information if the length of your employment is less than five years.
  • You can withdraw your pension using the PF number rather than the UAN.
  • Submit the composite claim form (Non-Aadhaar) at the EPFO office after providing the aforementioned information.
  • Online pension withdrawal

One can take the following actions to easily withdraw your PF pension online:

  • Open the UAN portal and log in.
  • Select “Online Services” from the menu.
  • “Claim Form-31,19 & 10C” should be chosen.
  • You can view member information. For verification, enter the final four digits of your account number.
  • Select “Proceed for Online Claim” and sign the certificate with your yes button.
  • (Form 31) Select PF Advance.
  • Choose the amount and the withdrawal’s purpose. You must also include your address information.
  • Apply by selecting the checkbox.
  • Upload a PAN card and two scanned photos.
  • You can withdraw your PF pension once your company has granted your request.

Pension contributions may be withdrawn in accordance with your needs. The following are the different pension withdrawal procedures:

  • Before a ten-year working period: 

To withdraw pension contributions before ten years of service, submit the completed composite claim form and choose between withdrawing your final PF balance and your pension.

  • Working for more than ten years: 

You are not eligible to withdraw the EPS amount until you are 58 years old in this case. Both the composite claim form and form 10C for the scheme certificate must be completed. Once you reach the age of 58, you can start receiving the pension.

  • Age 50–58, with ten years of job experience: 

In this case, you can submit form 10D and the composite claim form to get the early pension.

  • After turning 58: 

Once you reach that age, withdrawing your pension is simple and only requires that you complete form 10D. Then, you can take complete advantage of the benefits.

  • Employee Pension Scheme (EPS) Features:

Highlighted below are some essential components of the Employee Pension Scheme to better assist an individual in understanding it.

  • Reliable Income

The profits on EPS are assured because the Indian government is backing the programme; therefore, there is no risk involved in investing. The amount that shall be returned to the pensioner cannot be altered.

  • The Base Pension

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

  • Entrance Requirements

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

  • Retraction

Pension programmes for employees permit withdrawals based on two factors: age and years of employment. An individual has the complete right to withdraw their EPS once they turn 50 years old. However, there will be a lesser interest rate on the money you get.

  • Additional Considerations

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

If the widow or widower gets an EPS payment, they will keep getting it until the deceased person dies. The children will thereafter get the pension amount until they become 25.

Additionally, if the child has a physical disability, they are eligible to receive the pension payment until they pass away. The children will be entitled to a pension if the widow or widower marries again. Children under such conditions will also be considered orphans.

  • Conclusion:

Retirement benefits from EPS are quite generous. The pension money can be used to help you live comfortably and stress-free during your elderly years. The pension also provides for your loved ones when you are away. As a result, if you are not registered in the EPS, you need to start saving for retirement right away to ensure your financial security in old age.


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