How To Withdraw Pension Contribution In EPF Online?
The process of withdrawing pension contributions from the Employees’ Provident Fund (EPF) has been streamlined to offer a user-friendly online option. You can now access your accumulated pension funds online more efficiently as an employee. This blog will guide you on how to withdraw pension contribution in EPF online.
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What is EPF?
Employees’ Provident Fund or EPF is a social security scheme in India managed and regulated by the Employees’ Provident Fund Organisation (EPFO), a statutory body under the Ministry of Labour and Employment, Government of India. The EPF scheme is designed to provide financial security and retirement benefits to employees working in the organized sector.
Employees and employers contribute a fixed percentage of the employee’s salary in the EPF. The EPF account also includes a pension component (EPS), which is funded by the employer.
Important Features of EPS:
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Who pays EPS?
- Your employer pays 8.33% of your basic pay (up to ₹15,000) every month into EPS.
- You contribute nothing directly to EPS. It is from your employer's contribution.
At what age can you be eligible for a pension?
- You are eligible for a monthly pension at the age of 58, provided you have served at least 10 years of service.
- If you retire before 10 years of service, you can withdraw the EPS amount, but you will not receive a monthly pension.
How is the pension value determined?
The pension is based on:
- Your 60-month average salary of the last period of service.
- Total years of service.
- There is a formula to calculate the pension: (Pensionable Salary × Pensionable Service) / 70
What if you serve more than 10 years?
The longer you work, the higher your pension will be.
Other advantages:
- If the employee dies (prematurely or after retirement), the spouse and children can receive a family pension.
- You may also be eligible for an early pension from age 50 onwards, but it will be smaller.
What is EPS?
The Employee Pension Scheme (EPS) is a social security scheme introduced by the Employees' Provident Fund Organisation (EPFO). It is a component of the EPF scheme, which makes employees eligible for a pension after retirement at the age of 58.
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When Can You Withdraw Your Pension Contribution from EPF?
As per the EPF Act, any individual who retires after completing their service can get the pension amount by following proper procedure. Below are the mandatory requirements or conditions to withdraw the EPFO pension:
| Condition | Provision Under EPF |
| Retirement | If you defer pension withdrawal until 60 years, you benefit from an extra interest rate of 4% in a financial year. |
| Resignation | Employees can withdraw their EPF and pension contributions if they remain unemployed for 2 months after resigning. |
| Termination | Employees terminated from their jobs can withdraw EPF and pension after 2 months of unemployment. |
| Wedding Expenses | Partial withdrawals (50% of the total EPF contributed to date) allowed for marriage-related expenses of self/children/siblings. |
| Permanent Migration Abroad | If you are an Indian citizen but have migrated abroad permanently, you may be eligible to withdraw your pension contribution. However, certain conditions and documentation might be required to prove your permanent migration status. |
| Home Renovation | Partial withdrawals (12 times the current monthly salary) can renovate an existing home. |
| Home Loan Repayment | The employee can withdraw up to 90% of the EPF contribution |
| Permanent Disability | Employees with permanent disabilities can withdraw their full EPF and pension balance. |
| Migration Abroad | Employees who migrate abroad for permanent settlement can withdraw their entire EPF balance, regardless of their employment status. |
| Close of Business | Employees can withdraw their entire EPF and pension balance if a company is closed or going through a winding-up process. |
| Inoperative Account | Accounts that are inactive for a certain period (typically 3 years) can be withdrawn. |
| Serious illness | Certified by a medical authority, employees suffering from a serious illness can withdraw their pension contribution. They must have completed at least 5 years of service. |
| Death of the employee | The nominee of the deceased employee can withdraw the entire pension contribution. |
Let us now explore how to withdraw PF pension amount.
How To Withdraw Pension Contribution In EPF?
There are two cases under which an EPF account holder can withdraw the Pension.
EPF Form 10C
- Form 10C is a withdrawal form to claim the pension amount accumulated in the employee’s EPS balance under the Employee Pension Scheme (EPS).
- In the case of an unemployed employee for more than two months, the full and final settlement is done by withdrawing the full EPF balance by filling out Form 19 for withdrawing the EPF balance and then Form 10c for withdrawing the pension share balance.
- The pension amount is withdrawable only if the employee’s service period is less than 10 years.
- Form 10C can be used to transfer your EPS balance from one employer to another.
EPF Form 10D
- With Form 10D, you can claim a monthly pension after the employee’s retirement.
- Employees must have completed 10 years of service to be eligible to claim under this form.
- The criteria to get a monthly pension is that the employee is 58.
- The maximum pension an employee can get under EPS is Rs. 7,500 per month, and the minimum is Rs. 1,000 per month.
- In case of an employee’s death after retirement, their spouse or nominee will receive the monthly pension.
- If an employee becomes permanently disabled due to illness or accident, they can receive a monthly pension, regardless of whether they have served the minimum pension serviceable period.
- To be eligible for the pension, she/his employer must have contributed an EPS share under the EPS scheme for at least one month.
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Step-by-Step Process to Withdraw Pension Contribution In EPF
- Go to the official website of EPF (https://www.epfindia.gov.in/).
- Go to Services and select Employees.
- Enter your UAN and password.
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- Locate a tab stating ‘Online Services.’ Click on CLAIM (FORM-31,19, 10C or 10D) from the menu
- You will be prompted to enter the bank account number and sign the undertaking. Do as suggested.
- Select the claim form type – PF withdrawal/PFA advance/Pension withdrawal. Check the mark ‘I want to apply for’ and select the right option for pension withdrawal.
- Choose the reasons for PF pension withdrawal.
- Fill in the required details and upload the scanned copy of your cheque/passbook..
- Click on ‘Get Aadhaar OTP.’ You will get an OTP on your Aadhar-linked mobile number.
- Enter the OTP, click ‘Validate OTP’, and then the ‘Submit Claim Form’.
- Submit the form and monitor the request status online.
- After approval, the EPS funds will be directly deposited into your bank account.
Conclusion
Please note that pension withdrawal rules and eligibility to withdraw pension contribution in EPF can change over time, per the Employees’ Provident Fund Organization (EPFO) regulations and government policies. We recommend you check the official EPFO website or consult the HR department to ensure accurate and up-to-date information. Additionally, when you withdraw your pension contribution, you must follow the prescribed process for EPFO pension withdrawal, fill out the required forms, and provide the necessary documents to initiate the withdrawal request.
FAQs
How is the pension amount calculated under EPS?
The pension amount is calculated based on the average monthly salary during the last 12 months of an employee's service and the number of years of service. The calculation formula varies depending on the employee's joining date.
Can I withdraw my pension contributions before retirement?
Suppose you have not completed the minimum vesting period of 10 years. In that case, you can withdraw your pension contributions, EPF contributions, and interest earned, but your pension benefits will be forfeited.
What is the minimum and maximum pension amount under EPS?
The government determines the minimum and maximum pension amounts. Your actual pension amount will depend on your average salary, years of service, and pension formula.
Can I transfer my EPS contributions to a new employer?
You can transfer your EPS contributions to a new employer's EPF account. This ensures the continuity of your pension benefits and service history.
What happens to my EPS contributions if I change jobs frequently?
If you change jobs frequently, your EPS contributions accumulate separately for each employer. However, if you have less than 10 years of service with any one employer, you might not be eligible for pension benefits.
How can I track the status of my EPS pension claim?
You can track the status of your EPS pension claim through the official EPF portal using your Universal Account Number (UAN) and password. The portal provides updates on the progress of your claim.
Can an employer can deduct employer’s share of contribution from the wages of employees?
An employer cannot deduct their own share of contributions in the Employee Provident Fund (EPF), from employees' wages. Such deductions are not permissible under Indian labor law and can lead to legal repercussions.
Can an employee contribute to the EPF after leaving the service?
No, an employee cannot contribute to the Employee Provident Fund (EPF) after leaving their service. This is primarily because contributions to the EPF require a matching contribution from the employer, which is not possible once the employment relationship has ended.
Is there any time limit for withdrawal of Provident Fund dues?
Yes, there is a time limit for the withdrawal of Provident Fund dues, specifically in the case of resignation from service. An employee who resigns must wait for a period of two months before they can withdraw their EPF amount. This waiting period applies only to those who resign and not to those who retire (superannuation).
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