Confused About EPS Withdrawal: How Can I Resolve My Missing Funds Issue?

I worked with an organization from 2002 to 2004. The total EPS amount contributed by my employer in the EPS fund during this duration was Rs. 7752/-. I applied for withdrawal of this amount using form 10-C on 26th Jul 2007. On 11th Mar 2008, I received an amount of Rs. 4536/- in my bank account. After that, no other amount was credited to my bank account for that withdrawal. I have recently checked with the EPF branch about the same, and the case is showing settled in their records. I have seen this myself on their computer screen.

Also, one of the EPFO employees told me that no interest is paid on the amount accrued in the EPS fund, so I should get only Rs. 7752/-. I am not sure if this is true. Can anyone help me settle this issue? What should I do to get the balance amount? Am I also entitled to the interest on the balance amount? If yes, at what rate?

Regards,
Jatin

For more details, please refer to the attached sheet.

Regards,
Jatin

Dear Jatin,

EPS contribution and withdrawal benefits are different. To calculate the withdrawal benefit, there is a factor in Table D to be multiplied by the last drawn salary, subject to a ceiling of Rs. 6500. As of now, the factor for 2 years is 1.99. Before the amendment, it was above 2. (As I am far from my office, I am unable to provide the correct figure and effective date).

Please provide the last drawn salary & contributory period in EPS (from/to date). I shall attend to your case on 18.10.2010.

Abbas P.S

Thank you, Abbas.

I have attached an Excel sheet stating my salary drawn and contributory period in my previous post. Please refer to it for these details.

My problem is that when I applied for withdrawal of this amount using Form 10-C on 26th Jul 2007, I received an amount of Rs. 4536/- only in my bank account on 11th Mar 2008, whereas my employer contributed Rs. 7752/- to this EPS fund during my service with that organization. The EPF branch has closed the case and shows it settled in their records.

As per my understanding, I should have received at least the total contribution amount (Rs. 7752/-), if no interest or government contribution is accrued with it when I apply to withdraw all the amount contributed into EPS before completing 10 years of service with that organization.

Additionally, I have doubts about what one of the EPFO employees told me regarding EPS withdrawals: no interest or government contribution is paid on the amount accrued in the EPS fund if we apply for withdrawal before completing 10 years of service.

Regards,

Jatin

Dear Jatin,

The accumulation in the PF account and the withdrawal benefit are different. There is no direct connection with the EPS contribution. Your service in EPS will be rounded to the nearest year. For this purpose, 6 months and above will be rounded up, and below six months will be rounded down. There is a corresponding factor (in compliance with the number of years of service) stipulated in Table D. This will be multiplied by the last drawn salary subject to a ceiling of Rs. 6500, so that the withdrawal benefit will be arrived at.

As per Table D, in many cases, the withdrawal benefit is less than the actual amount paid. If somebody gets more than the remittance, the enhancement/interest component will be very nominal.

Abbas. P. S.

Dear Abbas,

If the factor is 1.99 in my case and my last drawn salary = Rs. 4700/- (as specified in the Excel sheet), then my EPS withdrawal amount should have been Rs. 9353/- instead of Rs. 4536/-. Please correct me if I am wrong. How is the withdrawal amount for EPS calculated using this factor? From where can I get more insight into Table D and withdrawal calculations?

Regards,
Jatin

Please provide your Date of Joining and Date of Exit from EPS.

Note: The effective date of the revised Table D is 10.6.2008. Prior to this, it was above 2 instead of 1.99.

Regards,
Abbas P.S

I had resigned from an organization in March 2009 after working there for 125 months (> 10 yrs). Since I joined the company, the PF was managed by the company's trust. Though last year I got my full PF amount from the company, my questions are:

- Am I eligible for a pension under EPS-95?
- Does the private trust-managed PF follow different guidelines?

Regards,
Ashok

Hello Abbas,

I believe my date of joining EPS is the same as my date of joining that organization, which was 01/08/2002. My date of relieving from that company was 15/05/2004, and the date of application for EPS withdrawal was 26/07/2007. The date of the credit of EPS withdrawal amount into my bank account was 11/03/2008. I am not sure which of these dates you consider the date of exit from EPS. I hope you get the required information from these dates.

Regards,
Jatin

Dear Jatin,

Your date of joining in service and EPS may be different. Otherwise, there may be some break in service or non-contributory period. Even for 1 year, if your last drawn salary applicable for PF is 4700, you had to get 4700 x 1.02 = 4794.

The date of exit from EPS is the last day of contribution to EPS. This will be either the last date of contribution to EPF or the date of attainment of 58 years, whichever is earlier.

It would be better if you contact the concerned Office of Regional PF Commissioner. They are the only ones able to provide the correct reason.

Abbas P.S

Dear Abbas & Jatin,

It was quite an interesting case for discussion. If my understanding is correct, the wages for computing EPS withdrawal are based on the average of wages drawn for the 12 months preceding the date of leaving. In Jatin's case, the total wages for the last 12 months (from July 2003 to June 2004) work out to Rs. 52893/-. If we divide it by 12, then the average wage works out to Rs. 4415.25. If this is multiplied by 1.02, as mentioned by Abbas, then the withdrawal amounts to around Rs. 4503/-. Is this calculation correct? I have assumed he was not a member of EPS for one year from the date of joining.

M.V. KANNAN

Hello Kannan & Abbas,

Thanks for contributing to this discussion. It will be a case for all to understand the workings at the backend.

To further add, I think I was a member of EPS right from the beginning of my joining that organization because I filled all the forms at the beginning itself, and I know that the employer started submitting the employer contribution into EPS from the very next month.

I am still not clear why we are considering it 1 year of membership in EPS. According to me, we should have taken a factor of 1.99 from table D. Please clarify how we take it as 1.02.

Also, if we consider membership for the whole time period of employment, then the average comes out to be 4336/-. (Refer again to the attached Excel in the initial posts) Am I right?

Regards,
Jatin

Dear Jatin,

For withdrawal benefit, two components have to be considered:

1. Average salary of the last 12 months.

2. Factor stipulated in Table D in compliance with the number of years' service in EPS.

For 1 to 9 years, (w.e.f 10.6.2008) the factors as per Table D are 1.02, 1.99, 2.98, 3.99, 5.02, 6.07, 7.13, 8.22, and 9.33 respectively. From 1.8.2002 to 15.5.2004, it is 21.5 months and is rounded to 2 years with a corresponding factor of 1.99. However, if 4 months are deducted for any reason such as:

1. Date of joining job and EPS are different.
2. Date of attaining 58 years of age before completing service.
3. Break in service.
4. Non-contributory period due to LWOP, lapse from the employer, etc.

Then the above service in EPS will be rounded down to 1 year with an equivalent factor of 1.02.

The format of the Excel sheet mentioned was created by me but has been altered by someone unskilled. For example, the ceiling limit from 1.6.2001 onwards is Rs. 6500, but as per the attached sheet, it is w.e.f 1.11.2003. Therefore, do not rely on that.

Note: Regarding the last drawn salary.

In Table D, it is written as 'Wages at Exit.' But practically, it is the average of the last twelve months. You may verify this with your employer or contact your Regional PF Commissioner's Office for accurate information.

Abbas.P.S

Dear Jatin,

I will certainly agree with Abbas's suggestion that it is time for you to approach the EPFO with your query. In my opinion, it ought to have been a clerical error by the section clerk. He may have inadvertently considered your service as one year instead of two years due to oversight, and this could have eluded the attention of the section head. Generally, few people go through the details and follow up on them. Therefore, it is high time that you take up this matter.

Regards,
M.V. Kannan

Those who have a contributory period of 114 months or more in EPS are eligible for a pension. Whether your PF is managed by the PF authorities or an exempted Trust, it is immaterial in this regard because EPS is directly under the EPFO, with no connection to the Trust.

Regards,
Abbas.P.S

Dear Abbas ji,

After the amendment w.e.f 1.09.2014, a new formula has been introduced to calculate the EPS withdrawal benefit, which is as follows: Average Weighted wage multiplied by the factor as shown in Table D.

Here, could you please explain to me how to calculate the Average Weighted Wage? (2 factors are taken: wages before 01.01.2014 and wages at the time of exit, which are further multiplied by some value that I do not know). If you have any idea, please share.

Regards, Dinesh Kumar