Navigating Retirement: Should I Apply for Pension Now or Wait Until 60?

Hi, I am a working woman and 59 years old. In our company, the retirement age is 60 years. I have been a PF member since 1987. Recently, I came to know that both my PF and FPF contributions are going to PF only, and the FPF account is closed. In that case, which is more beneficial: should I wait until 60 years to apply for the pension, or is it worth applying now while still on duty? My basic salary is Rs. 45,000/-, and my monthly contribution is Rs. 1800/-. How much pension am I entitled to? My service period is 37 years.

Looking forward to your reply.

Regards, SM

Contributing to the Pension Fund

For contributing to the PF, there is no age limit, but you cannot contribute to the Pension Fund once you have attained the age of 60 years. Actually, the age for contributing to the pension fund is 58, but it can be extended by two years. This can be done without contribution to the pension fund or with a contribution to the pension fund.

Deferring Pension Benefits

If you defer your pension for one year and opt to start the pension at the age of 59, you will receive a 4% additional pension. If you choose to draw the pension at 60 years of age, i.e., deferring the pension for two years, the pension will be increased by 8.16%.

Impact on Pensionable Service

If you continue contributing to the pension fund until 59 or 60 years, as the case may be, the pensionable service will also be increased to that extent.

Options Without Employer Contribution

Since your employer is not contributing to the pension fund, you can either start drawing the pension or defer it for one more year to avail of an 8.16% additional pension amount.