Confused About EPS Withdrawal Amounts? Seeking Clarity on Employee's Case

EPS Withdrawal Query

I have a doubt regarding EPS withdrawal. Please help me out with your valuable suggestions.

I am working as an HR Executive. One of our employees has a basic salary of Rs. 30,000/- per month. He is contributing to EPF & EPS on higher wages. So his monthly deductions are 30,000*12/100 = 3,600 (EPF: Rs. 1,101 & EPS: Rs. 2,499).

A few days back, he resigned and submitted forms to withdraw his PF amount. However, he received a lesser amount than he expected. When he inquired at the PF office, they explained that since he contributed more than required towards EPS, they would consider his EPS contribution as Rs. 541, and the remaining amount would not be paid.

Is this correct? Please suggest.

Thank you.

Regards,

In your calculation, the EPS amount was wrongly calculated. The correct amount should be a maximum of Rs. 541/- per month. The differential amount will be credited to Account No. 01.

The differential amount will accumulate in Account 01 and can be withdrawn by filling Form No-19. Against Form-10C, he would receive only Rs. 541/- per month.

Regards,
Jitender

Thank you for your valuable reply. As you mentioned, only Rs. 541/- will go to the EPS account, and the rest of the amount, i.e., Rs. 1,958/-, can accumulate in the EPF account, i.e., A/c No: 01. Is that correct?

I think your employer has restricted the salary to ₹6,500 for employer contribution. EPS would be ₹6,500 * 8.33% = ₹541, and EPF would be ₹6,500 * 3.67% = ₹239. So, the contribution to A/C 1 would be ₹541. In my point of view, they may have done this.

Regards,

The Pensionable salary under the Employees Pension Scheme, 1995 was restricted to Rs. 6500 per month. The contribution towards the pension scheme from the employer's contribution, i.e., Rs. 541, is being credited under the employee's account in Ac. No. 10, and the balance amount of the employer's contribution will go under the employee's provident fund account. This is the principal practice and law as prescribed under the scheme. This will be applicable to all who draw a salary of more than Rs. 6500, which will be restricted as if their salary is Rs. 6500 as a pensionable salary. Since this ceiling is increased to Rs. 15000, the formula shall remain the same, i.e., 8.33% on the pensionable salary and the remaining under the PF account.

Withdrawal from the Pension Scheme

Regarding withdrawal from this pension scheme, a member is permitted to withdraw his pension scheme by submitting Form 10 C, subject to the contribution towards EPS being less than 10 years. In such a case, the member will receive the full amount with interest. If this period exceeds, the member should apply for withdrawal by submitting Form 10 D. In such a case, the member will receive a Pension Certificate in lieu of the EPS amount, and the member should wait until attaining the age of 58 years. Alternatively, if the member joins a service where the PF scheme is applicable in the meantime, they should surrender the Pension certificate so that their past pensionable service can continue until reaching the age of 58 years. Then, they will receive a pension every month under the scheme.

I hope you have followed this. If you have any doubts, feel free to write in this thread, as contributing members will give their opinions.

Regards,
Adoni Suguresh
Sr. Executive (Pers, Admin & Ind. Rels) Rtd
Labour Laws Consultant.