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How to Withdraw Pension?

A detailed guide on how you can withdraw your pension amount

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Employee Pension Scheme was introduced in 1995 with the primary goal of providing  financial security for employees in the organised sector. Under this scheme, employers pay their employees a fixed amount of money so they can live a comfortable and secure life post-retirement.

Knowing the details of your pension scheme is crucial to prepare for you future. This means you must understand how to withdraw pension contribution from the scheme when the time comes. Let’s understand more about the scheme to learn how to withdraw pension:

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Employee Pension Scheme| Eligibility Criterion

EPS is available to all employees who are eligible for the Employees Provident Fund (EPF) plan. The Employees' Provident Fund Organisation (EPFO) administers this scheme, which ensures that employees receive a pension once they reach the age of 58. 

Let’s look at the eligibility criteria to avail Employee Pension Scheme benefits:

1. The individual should be a member of the Employee Provident Fund Organisation (EPFO).

2. To avail pension under the Employee Pension Scheme, an individual must work for a minimum of 10 years and should be at least 50 years old to get early pension. Otherwise, the right age to claim the pension is 58 years old.

In case of the pension is not paid for two years, before you turn 60, you can receive the pension at 4 per cent of the additional rate.

Source: https://www.epfindia.gov.in/site_docs/PDFs/Downloads_PDFs/EPS95_update102008.pdf

Features of Employee Pension Scheme (EPS)

To help you understand Employee Pension Scheme, we have highlighted some key features.

1. Guaranteed Returns

Since EPS is backed by the Indian government, the returns are guaranteed, and investing in the scheme carries no risk. The amount that will be returned to the pensioner cannot be altered.

2. Minimum Pension

Individuals who participate in the EPF programme are enrolled in the EPS programme automatically. The individual will earn a monthly pension of Rs.1,000 at the very least.

3. Enrolment Criteria

Employees who earn a base salary plus DA of Rs.15,000 or less are required to enrol in the scheme. 

4. Withdrawal 

An individual can withdraw Employee Pension Scheme depending on two factors- age and years of work experience. Once you reach the age of 50, you will be able to withdraw your EPS. However, the money you receive will be at a lower interest rate.

5. Other Conditions 

  • Whether or not they meet the service period condition, people who are partially or wholly physically disabled are entitled to a pension. This pension also begins on the day of disability and continues for the rest of one's life.

4. Withdrawal 

An individual can withdraw Employee Pension Scheme depending on two factors- age and years of work experience. Once you reach the age of 50, you will be able to withdraw your EPS. However, the money you receive will be at a lower interest rate.

5. Other Conditions 

  • Whether or not they meet the service period condition, people who are partially or wholly physically disabled are entitled to a pension. This pension also begins on the day of disability and continues for the rest of one's life.


  • If the widow or widower is receiving an EPS payment, they will continue to receive it until he or she dies. After that, until they reach the age of 25, the children will get the pension amount. Furthermore, if the child is physically disabled, they are entitled to the pension amount until they pass away. If the widow or widower remarries, the children will be eligible for the pension. Furthermore, under such circumstances, children will be classified as orphans.

How is Pension Amount Calculated Under EPS? 

Before you can understand how to withdraw pension from EPS, it is important to understand how the amount itself is calculated. Essentially, your pension amount would depend on the number of service years and your salary.

Unlike the EPF contribution, the pension contribution is not split by employees and employers. Only 8.33 percent of the employer's part of the 12 percent goes to the EPS plan.

Here’s the formula used to calculate the pension amount:

EPS = (Pensionable Salary * Service Period) / 70

Wherein,

1. Pensionable Salary 

The pensionable salary is the average monthly pay earned in the previous 12 months prior to leaving the programme. 8.33 percent of the employee's wage is contributed by the company. For example, if your basic income is INR 15,000, the employer's EPS contribution is INR 1,250 (15,000 * 8.33%). In addition, non-contributory periods (if any) in the previous 12 months will not be taken into account. For those days, the employee will be compensated.

2. Service Period

Your pensionable service is calculated based on the entire amount of time you have worked. Even if you've changed employment, the total amount of time you've worked for each employer is combined together to determine your pensionable service period. If the aggregate includes months, the overall duration will be rounded to the nearest year.

Source:

https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2009-2010/PensionCalculationMadeEasy.pdf

When to Withdraw from the Employee Pension Scheme? 

According to the Employee Provident Fund Act of 1952, any person who retires after completing 58 years of work is eligible to withdraw the full PF amount and claim the Employee Pension Scheme amount.

Source: https://www.epfindia.gov.in/site_docs/PDFs/Downloads_PDFs/EPS95_update102008.pdf

How to Withdraw Pension Contribution from PF?

If you want to know how to withdraw pension contribution online from your provident fund, there are two ways to do this. Here’s how it works:

1. Using Aadhar Card 

If you have an Aadhaar Card, you will have to submit a Composite Claim Form (Aadhaar) directly to the EPFO office without the attesting the claim from your employer. After which, you will have to attach a cancelled cheque with the form and your entire PF balance amount will be credited to your bank account.

2.  Without using Aadhaar Card

The second method is if you don’t have an Aadhaar card  and are unable to get one made, then you will have to submit your PF number. Along with the PF number, you can fill Composite Claim Form (Non Aadhaar). If you haven’t completed 5 years at your workplace, you will have to submit details like PAN (Permanent Account Number) and attach 2 copies of form 15G or 15H.  If you do not have UAN (Universal Account Number), you can provide PF account number.

If you have an Aadhaar Card, you will have to submit a Composite Claim Form (Aadhaar) directly to the EPFO office without the attesting the claim from your employer. After which, you will have to attach a cancelled cheque with the form and your entire PF balance amount will be credited to your bank account.

2.  Without using Aadhaar Card

The second method is if you don’t have an Aadhaar card  and are unable to get one made, then you will have to submit your PF number. Along with the PF number, you can fill Composite Claim Form (Non Aadhaar). If you haven’t completed 5 years at your workplace, you will have to submit details like PAN (Permanent Account Number) and attach 2 copies of form 15G or 15H.  If you do not have UAN (Universal Account Number), you can provide PF account number.


How to Withdraw Pension Contribution from EPF?

To withdraw your pension contribution from EPF, you will have to follow these four conditions:-

1. If you are withdrawing from PF pension amount and Employee Pension Scheme amount before completing 10 years at workplace

You can claim both PF and EPS amount if you have not completed 10 years at your workplace. For this, you will only have to fill the Composite Claim Form and choose both the options ‘Final PF balance’ and ‘pension withdrawal’. If you are planning to work again, then you can submit the Form 10C and get the ‘scheme certificate’.

 2. If you are withdrawing from PF pension amount and Employee Pension Scheme amount after completing 10 years at your workplace

If you have worked for more than 10 years, you cannot withdraw the EPS amount. You can fill the Composite Claim Form along with the Form 10C to get the scheme certificate. Pension will be paid to you after you cross 58 years.

3. If you are withdrawing from PF pension amount and Employee Pension Scheme amount between the age of 50 and 58 years

If you are between 50 and 58 years and have completed 10 years at your workplace, you can claim an early pension. Also, you have to fill Form 10D along with the Composite Claim Form.

4. If you are withdrawing only from the PF pension amount along with full pension after the age of 58 years

If you are 58, it is very simple to get the full claim of pension. You will only have to submit the Form 10D.

Choose and submit the form. Now you can enjoy the PF and EPF.

Documents Required to Withdraw Pension Contribution

We have mentioned a list of documents which you will need to withdraw the pension contribution.

1. Form 19

2. Form 10C and Form 10D

3. Form 31

4. Two revenue stamps

5. Bank account statement

6. Identity proof

7. Address proof

How to Withdraw From The Employee Pension Contribution Online?

To save time and a visit to a branch of the EPFO, we have mentioned a step-by-step guide on how you can withdraw pension contribution online.

Step 1- Log in to the UAN Member Portal along with your UAN and secret password.
Step 2- Go to the menu bar, click on ‘Online Services’ and choose ‘Claim (Form-31, 19 & 10C) button.
Step 3- Now you will see the member details on your screen. Enter the last four digits of your account and click on the ‘Verify‘ button.
Step 4- Click on ‘Yes’ button  to sign the certificate and proceed ahead.
Step 5- Click on the ‘Proceed for on-line Claim’ option.
Step 6- Choose the ‘PF Advance (Form 31)’ to withdraw your funds on-line

To save time and a visit to a branch of the EPFO, we have mentioned a step-by-step guide on how you can withdraw pension contribution online.

Step 1- Log in to the UAN Member Portal along with your UAN and secret password.
Step 2- Go to the menu bar, click on ‘Online Services’ and choose ‘Claim (Form-31, 19 & 10C) button.
Step 3- Now you will see the member details on your screen. Enter the last four digits of your account and click on the ‘Verify‘ button.
Step 4- Click on ‘Yes’ button  to sign the certificate and proceed ahead.
Step 5- Click on the ‘Proceed for on-line Claim’ option.
Step 6- Choose the ‘PF Advance (Form 31)’ to withdraw your funds on-line


Step 7 – Now you will be asked to choose the ‘Purpose that advance is required’, the quantity needed and also the employee’s address
Step 8 – Choose the tick button on the certification and submit your application
Step 9 – currently you'll be asked to submit scanned documents of PAN card and your 2 photographs.
Step 10 – Your boss can now approve your withdrawal request after which your money can be withdrawn from your EPF account and in the bank account.

Follow these  simple steps to withdraw your pension contribution online.

Frequently Asked Questions (FAQs) 

Q1. Can an employee contribute to an EPF after quitting their job?

A: No. This is because in the absence of salary, an employer will not be able to contribute to the Employee’s Provident Fund. Moreover, any contribution made by the employee should match with the employer.

Q2. At what age is the employee eligible for pension?

A: An employee is eligible for pension or superannuation at the age of 58 years. If an employee leaves between the age of 50 to 57, he/she can claim early pension

Q3. Can I change my age/ date of birth?

A: Yes. Date of Birth/Age once given is not normally changed, however it can be changed with proper documentary evidence. You can see the guidelines provided in circular ‘Change of Date of Birth for EPF & EPS members’ dated 03/04/2020, available on the website (https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y20202021/Circular_on_date_of_Birth_0302020.pdf).

Q4. Who can be a member of the EPFO?

A:  A person who is employed for wages in any kind of work, manual or otherwise, in or in, connection with the work of an establishment covered under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in or in connection with the work of the establishment.

Q5. Is it compulsory to withdraw the pension benefit along with the P.F. amount?

A: No. An employee can withdraw his PF amount and maintain a lien in the Pension Scheme by availing a Scheme Certificate.

Q6. Whether an employee already drawing Pension under EPS, 1995 is required to join the PF and Pension Fund?

A: Yes. He is required to join only the PF and he cannot become a member of the Pension Scheme.

Q7. How long a member can retain his Provident Fund in his account?

A: The membership can be retained till the withdrawal of his Provident Fund dues. However, if the account does not receive any contributions for more than 3 years interest won’t be credited to the account after the 3rd year.

Q8. Is withdrawal from EPS taxable?

Withdrawal from EPS before 10 years of continuous employment will be subject to a ten percent TDS. If the total length of service in the year of withdrawal is less than 10 years, the withdrawn sum is subject to tax.

Source:

https://www.epfindia.gov.in/site_docs/PDFs/Downloads_PDFs/EPS95_update102008.pdf

https://economictimes.indiatimes.com/wealth/earn/how-to-withdraw-pf-and-eps-money-after-leaving-your-job/articleshow/61831673.cms?from=mdr

https://www.epfindia.gov.in/site_en/WhichClaimForm.php

https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2009-2010/PensionCalculationMadeEasy.pdf

ARN No: Feb22/Bg/16