Confused About EPF Contributions? Clarifying Employee and Employer Shares at Withdrawal

Dear Sir, I am a little bit confused about the employee share being 12% and the employer share being 3.67% and 8.33% for the pension scheme. Now, I want to know if the remaining 8.33% is also added at the time of withdrawal of PF.

An employee's share of 8.33% goes to the pension fund, and this amount shall be withdrawn if you have not completed 10 years of service.

Regards,
SND

Dear Sir, this is okay. I have not completed 10 years of service. Suppose anybody completes 10 years of service, then where does the remaining contribution go?

Thank you.

The contribution towards the pension fund at 8.33% goes to the Pension Fund. You will be able to withdraw the accumulations provided you have not completed 9 years and 6 months of continuous service. If your service period is more than 9 years and 6 months, your accumulated contribution will be held in the pension fund of EPFO. A pension scheme certificate will be issued to you by your area EPFO, SRO, indicating your eligibility for a pension after reaching the age of 58. Please keep this certificate safe and provide a photocopy when joining another establishment where EPF contributions are made (original not required).

Upon reaching the age of 58, you can apply for a pension from EPFO along with the original scheme certificates in Form 10-D.

Regards,
M. Venkatraghavan

Mr. Venkatraghvan has explained the facts and factuals perfectly. I agree with him but want to add one thing: if any employee doesn't continue in employment after receiving the scheme certificate or is in a situation where the provisions of the EPF & MP Act 1952 have not been attracted, then on completion of the age of 50 years, he shall apply for the reduced pension with Form 10 D. An employee of this type would lose pension by 4% per year. That is to say, for every 100, he will receive Rs. 68 as a pension.

Regards,
KIRAN KALE

@suyoglabourconsultant & Mr. Venkatraghavan: Generally, whenever anyone wants to withdraw the EPF fund, there are two forms to be submitted together, Form 19 & 10C. Is it necessary to withdraw the EPF amount even if one wants to withdraw only the pension fund?

I am Ramchander. I have completed 10 years in the company. How much amount goes to my pension? Kindly tell me.

Currently, my salary is ₹9,600/- (₹5,865 for basic, ₹2,077 for VDA, and ₹1,500 for HRA). The EPF deduction from my salary is ₹953/- per month.

Regards,
Ramchander

The view of Mr. Venkataraghavan is correct. However, I would like to add that an employee can avail of a pension at a reduced rate after completing 52 years.

Regards,
R.K. Nair

Dear GODZY,

One can withdraw both the amounts that stand in his credit when his service in EPF & EPS is below 9.6 years. He can withdraw only the EPF account by filling Form No. 19 and keep his EPS account as it shall be continued when he joins a new company where he becomes a member of EPF/EPS. He could save service years for the eligibility of 10 years or otherwise by the withdrawal of the EPS amount through Form 10C. He will lose service benefits and have to start anew to meet the required 10 years of service. PF withdrawal doesn't affect anymore.

Regards,
KIRAN KALE

Dear all members in this thread, I have deliberately avoided discussing the reduced pension at 50 years because a prerequisite for this is that the member should not be in employment after reaching 50 years of age. When the scheme was introduced in 1995, the rate of reduction per annum was 3%, and a person at 50 years was getting 75% of the normal pension. However, now, due to more reduced pension claims, the rate of reduction per annum has increased to 4%, and a member at 50 years would get 68% of the normal pension. The maximum wage limit for pension is Rs. 6500/=. Any employer contribution at 8.33% over and above that limit (Rs. 541/= per month) is diverted to the company contribution of the EPF account of the individual member. For any person who may want to continue in employment after 50 years, they can keep the scheme certificate and get a pension at any maximum age between 50 to 58 when they choose to leave work. A person drawing a monthly pension should produce a Life certificate from their banker in November of the year to their area pension office; otherwise, their pension for the next year would be stopped at the PF office.

Anyone who becomes disabled can also apply for a pension on medical grounds even if they have not reached the requisite age for a reduced pension.

Ramchander can calculate the pension amount at the maximum pension salary (Rs. 6500) multiplied by the number of years of service (now 10) divided by 70, which is the amount he would be getting at 58 years.

Regards,
M. Venkatraghavan

Thank you for your information, sir. I have a query regarding PF. I am looking to resign from my current company, where I have served for 10 years and 2 months. My present salary is 9605/- (5865 + 2077 + 953) (basic + VDA + HRA), with an EPF deduction of 953/- every month.

EPF Withdrawal Query

I would like to know how much I will receive from the EPF after resigning. Could you please provide me with this information? Thank you.

Hi Team,

I served with my previous organization for 10+ years and withdrew my PF money. I have now joined a new organization and have been assigned a new PF account. I understand that individuals serving for more than 10 years are eligible for the PF pension scheme. How can I enable the pension scheme? How do I link my previous service to show continuity in my new account?

Thank you,
Ganesh