Understanding EPF and EPS Deductions: How to Withdraw and Get a Pension After 9.5 Years

Dear Seniors, I have a doubt regarding EPF & EPS. In my company, PF is deducting more than the wage ceiling. For example, my Basic is ₹10,000, then PF deduction is ₹1,200 from my side and another ₹1,200 from the employer's side. The employer's amount will split into two parts as EPF & EPS, i.e., 3.67% (₹367) & 8.33% (₹833). Now, my questions are:

1) The EPS ceiling limit is ₹541, so the remaining ₹292 will automatically go to EPF. Is this correct?

2) How can I withdraw the EPS amount after completing 9.5 years? What are the rules to get a pension after 9.5 years of service?

Please provide your inputs.

Thanks

If the employer contribution to EPF is Rs. 1200, Rs. 541 will only be paid to EPS. The balance, the full amount viz. Rs. 659, will be credited to your PF account.

Pension Eligibility and Conditions

You will get a pension from the date of completion of 58 years of age even if you are in service. To get the pension before attaining 58 years, there are some conditions:
1) You should not be in (PF applicable) service.
2) You will get a pension only after attaining 50 years.
3) For each year below 58 years, you will lose 4% of the pensionable amount.

Regards,
Abbas. P. S.

Dear Abbas, Thank you for your inputs. Is there any chance to withdraw the EPS amount after the completion of 9.5 years? How many years will he receive a pension after reaching 58 years of age?

Kind regards

Pension Options After 9.5 Years of Service

After completing 9.5 years, you have no option other than availing of the pension. Once you avail of the pension, it will continue until the death of the member. After death, the widow or widower will receive 50% of the member's pension. Additionally, two children will each receive 25% of the widow's pension until they reach the age of 25.

Regards,
Abbas. P. S

If an employee completes 10 years of service in one company at the age of 40 and continues service in another company, should we deduct EPS from him?

What if an employee wants to withdraw their EPF and EPS? Can an employee withdraw EPF and EPS after completing 9.5 years of service or more than 10 years of service?

Thank you.

Yes, for those who are in service but haven't availed themselves of a pension and haven't attained the age of 58 years, they have to contribute to EPS.

Regards,
Abbas. P. S

There is no option to receive withdrawal benefits from EPS after completing 9 years and six months, other than to avail of the pension.

Regards,
Abbas.P.S

Thank you very much for your inputs. One more doubt I have to clear. In my company, we are deducting PF more than the wage ceiling. For example, if the basic is ₹10,000, then the PF deduction from the employee is ₹1,200. If we apply the wage ceiling for all employees, the maximum PF amount comes to ₹780 per side. Now, my question is:

Calculating PF Under the Wage Ceiling

1) If the basic is ₹10,000 and the LOP days are 1, then how do we calculate PF under the wage ceiling?
- Is it 6500*12/100=780 or 6500/31*30*12/100=754? Which one is correct?

Thank you.

Instead of using the actual salary to calculate PF contribution, if you are considering the ceiling salary for deduction, then you should treat the ceiling salary as the actual salary. Therefore, if there is LWOP, the salary will be reduced (below ₹6,500) and the contribution should also be reduced accordingly.

Regards,
Abbas.P.S

Dear Abbas, I would like to confirm which of the following calculations is correct:

If the basic salary is Rs. 10,000/- and the Loss of Pay (LOP) is for one day, then the basic salary would be Rs. 9,677/-.

For the PF Calculation:

- Option 1: 6500 * 12 / 100 = 780
- Option 2: 6500 / 31 * 30 * 12 / 100 = 754

Please review and let me know if you need any further clarification.

Thank you.

Sir, what if an employee wants to withdraw his EPF and EPS? Can an employee withdraw EPF and EPS after completing 9.5 years of his/her service or more than 10 years of service?

Thank you, sir, for updating me. I have another question:

EPFO Registration in Multiple States

If a company is registered under EPFO and has its Establishment code already, and if the company runs its business in different states, should the company apply for another code from the sub-regional EPFO office of the states where the company is running business, or should it contribute its dues to its first code? Please clarify.

Regards