Understanding PF Contributions: When Can You Claim the 8.33% Pension Share?

Hello to all,

I hope you are doing well. We all know that in PF, 3.67% is contributed by the employer, and 8.33% goes into the pension scheme. So my question is, when can we claim or receive that 8.33%? Please explain.

Annu

Hi Annu,

The 8.33% that goes into the pension scheme can only be claimed upon retirement, that is, upon attaining the age of 58 years.

Regards,
Gaurang

After some years, we can claim some part of money from the PF account for our personal reasons like children's marriage, children's education, etc.

For that, we need to submit an application to the concerned person at your office. I think it is better to consult the concerned HR in your office. I don't remember the exact number of years to claim this.

Thanks & Regards,
Vani

Hi Vani,

You are right about being able to claim a part of the money from the PF account. We can get up to 50% of the amount deposited in PF as a loan after 6 years of continuous PF deposits.

However, Annu's question is about the Pension fund which is linked to the Provident Fund. The Pension fund can only be claimed and withdrawn after you have completed 58 years of age.

Regards,
Gaurang

Dear friends,

The query is in respect of the pension fund. Here, I wish to explain that if someone leaves their employment prior to completing the required service of 10 years for the PF or EPS, after being unemployed for a span of 60 days, they can withdraw 100% of the amount from their PF/EPS account.

In the case where someone has completed 10 years of service by contributing to PF/EPS, they will be eligible for the pension scheme and can receive it after attaining the age of superannuation for 100% pension or after 50 for reduced pension. Therefore, those who have not completed 10 years of contributive services to EPF/EPS can withdraw their PF/EPS amounts.

Regards,
KIRAN KALE

Kiran is right. I got back the EPS money as I served only 9 years and 1 month with my previous employer. Form 10 has to be filled and sent to the PF office through your employer.

In the current Indian IT industry environment, we generally keep hopping from one organization to another and transfer our PF to the new employer after around 3 months. However, during that process, do we also get the EPS part transferred as well?

Contribution made under the Pension Scheme can be received after retirement, attaining the age of 58 years, serving for at least 20 years, permanent disablement, or death to the nominee/legal heir.

Hi,

Could you please advise me if an on-roll employee leaves the organization after only 2 months of joining, are we still required to pay them a bonus when preparing their full and final settlement?

Sudhir
HRD

Dear Annu,

First of all, please note that EPF and pension fund are different. If you have not completed 10 years of service, you are not eligible for a pension. In such a case, you can either apply for a withdrawal benefit or a scheme certificate. Form 10-C is used for both options. However, it's important to understand that this withdrawal is not from the EPF. The calculation involves multiplying the factor in Table D by the length of service and the last drawn salary.

If you have completed 10 years or more of service (9 years & 6 months will be rounded up to 10 years), you become eligible for a pension after reaching the age of 50. But to start receiving the pension between the ages of 50 and 58, certain conditions apply:

1. You should not be in an EPF applicable service.
2. There will be a 4% reduction for each year below the age of 58.

If there is a gap between the end of your service and when you start receiving the pension, it is recommended to apply for a scheme certificate.

Superannuation pension becomes applicable upon reaching the age of 58. In such cases, the aforementioned conditions do not apply.

Abbas.P.S, ITI Ltd, PALAKKAD - 678 623

Dear Abbas,

Everything is in order, but for reduced pension, there is a 3% per year reduction and not 4%.

Regards,
KIRAN KALE

Dear All,

I understand that the question relates to the withdrawal of 8.33% contributed by the employer towards the pension scheme.

The fact is this 8.33% is not reflected in the Annual account slips Form 23 furnished by the PF organization every year.

This amount is maintained in a corpus fund by the EPFO. This amount can be claimed by the employee if he does not complete 10 years of service in an organization; this can be done by filing Form 10-C in case of quitting employment other than death. In case of death, the nominee has to file Form 10-D to claim a pension.

If the employee has completed 10 years, he can still withdraw this money if he can convince the PF authorities that he is moving abroad or is taking up business and is unlikely to be a member of PF in the near future. But if you are unable to convince the PF authorities, they will furnish a scheme certificate that can be utilized by you when you join an establishment covered under the PF. In fact, you have a choice to either opt for a scheme certificate or not in Form 10-C.

But there is another option: if you join an employer subsequently covered under the PF, it is beneficial to transfer the PF/EPS account to the next employer by furnishing Form 13.

By transferring your amount, your pensionable service will include your service with all employers in your career provided you have transferred your account properly. By opting for a scheme certificate, your pensionable service with all employers will be added up eventually. This will help you make yourself eligible for withdrawal benefits from the PF account. Please note that the withdrawal amount is from the PF account of the Employer + Employee amounts only. But for certain withdrawals, only the Employee's account is considered.

The last option for you to withdraw the amount from the EPS (Pension) account is when you attain 50 years and opt for reduced pension or upon attaining 58 years and opt for full pension. Even if you get a scheme certificate and you are employed subsequently with employers not covered under PF, you can still claim reduced pension at 50 years or full pension at 58 years.

If you still need any clarification, please send an email to kannanmv@vsnl.net.

Regards,

M.V. Kannan

Dear Kannan,

You have quoted, "If the employee has completed 10 years, he can still withdraw this money if he is able to convince the PF authorities that he is moving abroad or is taking up business and is unlikely to be a member of PF in the near future."

But under what provision/clause is this possible? For calculation also, there is no criteria. The Table D is prepared up to 9 years only.

Hence, please make it clear.

Abbas P.S.