Worried About My PF and Pension After 10 Years at Work – What Should I Know?

Hi Folks,

I have been working in an organization for 9 years and 2 months. I heard from my brother and friend that after completing my 10 years, I will not be able to take part of my PF. I do not know how much it will be. I am working for more than 9 years, yet there is a LOT of difference between my actual salary, which is dependent on multiple parameters that differ from month to month. However, my Basic is less than 10% of my actual salary. Even after working for so many years, I am currently not in a very good economic state. I am married and have 2 daughters. There is no difference for me if I quit work here and join another company. In fact, maybe I may get a better Basic pay over there. Still, I wanted to know what amount of my PF will be going towards pension. I actually do not intend to take any pension when I am 58 (I am currently 30, and after 28 years, what pension will I get for the basic of Rs. 2400 today). Kindly reply. Thanks in advance.

We have 3 benefits in PF Act:

1. Provident Fund
2. Pension Scheme
3. EDLI

Provident fund is applicable when you receive a salary below 6500 (basic + DA). Pension Scheme is applicable after 10 years of continuous service.

You will contribute 12%; it will fully go to the Provident Fund. The employer will also contribute 12%; it will be separated as 8.33% to the pension scheme and 3.67% to the Provident Fund.

Hi,

Have you been working in the same firm for the past 9 years, or have you maintained the same PF account for these 9 years? There is a clause in the PF Act that states if you have worked continuously for 10 years in the same firm or in one or more firms and transfer your PF account to the new firm, you will not be able to withdraw the entire 24% (12% employee contribution + 12% Employer Contribution). Instead, you will be eligible for a Pension under the Pension scheme.

If you complete the full 10 years, then you will only be able to withdraw the employee contribution, which is 12%.

Mr. Chinmay, you can check your PF account status on the epfindia.com website.

We have 3 benefits in PF Act:

1. Provident Fund
2. Pension Scheme
3. EDLI

Provident fund is applicable when you get a salary below 6500 (basic + DA). Pension Scheme is applicable after 10 years of continuous service.

You will contribute 12%; it will fully go to the Provident Fund. The employer will contribute 12%; it will be separated as 8.33 to the pension scheme and 3.67 to the provident fund.

If you are entitled to a pension (after 10 years of continuous service), the pension calculation depends on your last drawn basic salary, and wages for the last 12 months will be calculated backward from the last drawn wages.

For example, if you are entitled to a pension after 10 months only, and your basic is Rs. 2400/- which is later revised to Rs. 3000/-, the PF officials will consider your last 12 months' average basic wage:
- 2400 X 2 = 4800
- 3000 X 10 = 30000

Total = 34800 / 12 (average last 12 months salary) = 2900/- (pensionable salary)

Then the pension calculation is: pensionable salary X completed years of service / 70
- 2900 X 10 / 70 = 414 per month.

Dear sir/madam,

Can we get PF without calculating basic + DA in our gross salary? I need some guidance regarding salary break-up and PF calculations.

Thanks a LOT for your kind reply. I have been working in the same company for 9 years and 2 months. I have received an offer from another company now and am planning to quit and join them. When I inquired with my HR, they mentioned that only a percentage of the amount will go to the pension, and the remaining I can withdraw even if it is after completing 10 years of service.

I wanted to know if I quit after completing 10 years of service, how much amount will compulsorily go into the Pension scheme, and how much money can I withdraw now. Additionally, regarding the calculated pension amount of Rs. 414 per month when I am 58 years old (currently 28 years old), considering the effort and cost to collect that money, I have concerns.

If I have completed 10 years of service and wish to withdraw my entire accumulated PF amount after quitting the company, how much maximum will I be able to withdraw?

Kindly reply to me.