Navigating PF and Pension Withdrawal at 58: Can He Access Full Benefits and What Are the Options?

Dear HR Professionals, I have the following queries regarding PF:

1) Withdrawal of PF and Pension Money
If an employee has been enrolled in PF since 2007, with a current basic salary of INR 1,85,000 per month, and will turn 58 years old in March 2023, can he withdraw 100% of PF and pension money?

2) Employer Contribution to Pension
If an employer contributes 8.33% towards the pension, what would be the employee's monthly pension amount?

3) Pension Withdrawal Suggestions
If the monthly pension amount is less than the accumulated sum in the pension fund, what suggestions should be made to other employees? Should they withdraw the pension before 9.5 years?

4) Continuation of PF Contributions
Can an employee continue his PF contributions until the age of 60?

I humbly request assistance in resolving the above queries.

Hi,

1) He can withdraw 100% of the money if the total service rendered is less than 10 years.

2) 8.33% Pension Contribution
The contribution has an upper ceiling limit of Rs. 1250/- per month. If the total service rendered is more than 10 years, then he is eligible for a monthly pension. The amount depends on his total contribution to the pension fund.

3) Monthly Pension Amount
Obviously, the monthly pension amount would be meager, which will be paid from the accumulated fund. Employees who have served for more than 10 years will receive a pension contribution as a monthly pension only.

4) Continuation of PF Contributions
If an employee continues on the rolls, PF can be contributed, whereas the pension contribution stops after 58 years. The member can opt for receiving a pension after attaining 59 or 60 years of age.

Since he has been in service since 2007, he cannot withdraw his pension contribution. If he has been contributing based on his full basic salary, i.e., 12% of Rs 1,85,000, then an option for a higher pension can be provided now. In such a case, he would be entitled to receive a higher pension.

If he has been contributing to PF based on the statutory salary of Rs 15,000, then with a total service of 16 years, he may receive a monthly pension of Rs 3,428.

Monthly pension is a lifetime benefit extended to the spouse and children. Withdrawing the same after only 9.5 years of service is unwise.

He also has the option to choose to receive the pension after the age of 60, along with an additional incentive amount.