Understanding PF and Pension Confusion: How Do You Handle These Common HR Queries?

Dear All,

I am working for a TATA company in the HR Department, and we have a PF Corporate Trust in Mumbai. I always get confused about PF and Pension matters. My clarifications are as follows:

1) As per my understanding, the full contribution of the employee will go to the Provident fund, i.e., the PF trust in Mumbai. The employer's contribution of 12% is further bifurcated into a pension of 8.33% on Rs. 6500/-, which is a maximum of Rs. 541, and the balance of 3.67% to the Provident fund, making up the total of 12%. I hope the same calculation applies wherever a PF Trust is available.

2) If an employee works for 22 years and quits the company at the age of 52, how do we arrange for his Pension if he does not wish to receive it? Can he claim that amount through the pension office using form 10C settlement or what is the process?

3) I was informed by my seniors that if an employee is in service for more than 5 years and above and quits the company, he cannot claim the pension but has to obtain a scheme certificate. Is this information correct?

4) In the case of a transfer where a PF Trust is available, how can one get his pension transfer done?

Please share a presentation or more information on this.

Thanks in advance.

Regards,
Malini

Dear Malini,

Out of the employer's contribution, 8.33% (subject to a maximum of Rs. 541) will go to EPS, and the balance will go to the individual PF account. Whether it is a PF Trust or dealt with by PF authorities, it is immaterial.

An employee with 22 years of service at the age of 52 years is not eligible for withdrawal from EPS. He can either opt for a pension directly or apply for a Scheme Certificate.

Those who have a service of 9 years and 6 months and above are eligible for a pension. If the service is below this, withdrawal benefit is eligible. For those below the age of 58, they can also opt for a Scheme Certificate.

For pension transfer, apply in Form 13. This is common for PF as well as exempted Trust.

Abbas.P.S

Thank you, sir, for the valuable inputs. How do I get to know more updates on this? I visited the EPF site but did not find information on this. Please help. I would like to know in detail about the clauses, eligibility, etc.

Regards,
Malini

Mr. Abbas is absolutely right. If you want to know more updates, please refer to the Employees' Provident Fund & Miscellaneous Provisions Act.

The clarifications given by Sh. Abbasiti are legally correct. However, the point relating to basic wages drawn during the past 12 months is to be kept in mind for the calculation of Monthly Pension. In case the person does not want to serve further in any establishment covered under the Act, they are entitled to a reduced pension if they are less than 58 years of age or they may choose to wait until they reach 58 years of age.

As for further details, one can refer to the EPS 95/ FAQ section on the website of EPFO, i.e. [EPFO](http://www.epfindia.com), or specific clarifications can be obtained in writing from the concerned RPFC Office.

If I have worked at "X" company for 7 months, which is a PF-exempted organization, and then joined another "Y" company that does not have PF. Later, I joined another "Z" company. Can I transfer both EPF and EPS from "X" company to "Z" company? Will the 7-month service period be added to the Z company EPS account?