Understanding Pension Eligibility and PF Account Use After Job Changes: Can You Help?

Clarification on Pension Eligibility and PF Account Usage

Can anyone clarify the following doubts:

1. If a person works for 7 years and leaves the service of one company, and after 1 year, joins another company and works for 5 years, will he be eligible to receive a pension after reaching the pensionable age? If so, what needs to be done?

2. If a person completes 20 years of service in a company, leaves, and then, after turning 50 years old, opts for the reduced pension option without withdrawing the PF amount, can he use the same PF/EPF account number when joining another organization?

Thank you.

1. It all depends on how your PF account and Pension Fund have been treated. Have you continued your PF and Pension accounts from the first employer, or did you close them when you joined the other company? In any case, you are eligible for a pension only when you reach the pensionable age and not before, except when you are terminated and remain jobless.

2. Yes, if you have not closed the account by withdrawing your PF, you can also continue the PF account with the original number, regardless of who the employer is. In this case, only transfer formalities have to be complied with.

Regards,
Kumar S.

My opinion is as follows:

Point No. 1

One can be eligible for a pension in this case as he has completed 10 years of pensionable service; however, there will be a break in service, and this period will be treated as a non-contributable period and as such will not be counted for the computation of the pensionable service period.

If Point one has availed of a pension—maybe a Reduced or Short Service Pension—but has not withdrawn his PF amount, he can contribute to PF only and not to the pension fund. He will have a new account number for the new establishment and may transfer his old account into it or may withdraw the old amount as no interest will be given if not contributed after 1-4-2011.

Regards,
Chandok AK
RPFC (RETD.)
www.akchandok.com
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