Hello, One of my friends was doing a permanent job in a Bombay-based company where his basic salary was more than 30K/month. His PF was also deducted, which has only two parts in the passbook as per the government website. The first is the employee's contribution, and the second is the employer's contribution. After joining a new job (basic salary is >35K), his passbook shows a third type of entry: "Pension contribution."
Questions about Pension Contribution
So, the questions are:
1) How to avoid pension contributions?
2) Is a pension contribution compulsory?
3) Is the pension contribution amount (accumulated total pension contribution amount, not an employee/employer's contribution) withdrawn after retirement?
Acknowledge(0)
Amend(0)
1Questions about Pension Contribution
So, the questions are:
1) How to avoid pension contributions?
2) Is a pension contribution compulsory?
3) Is the pension contribution amount (accumulated total pension contribution amount, not an employee/employer's contribution) withdrawn after retirement?
Acknowledge(0)Amend(0)
Pension contributions are an important aspect of the Employees' Provident Fund Organization (EPFO) scheme and are obligatory for eligible employees. Here are the specific answers to the questions raised:
1) How to avoid pension contributions?
- Avoiding pension contributions is not a viable option for eligible employees under the EPFO scheme. The contributions are mandatory and form a crucial part of the retirement benefits provided by the organization. Attempting to evade these contributions is not recommended and can lead to legal implications.
2) Is a pension contribution compulsory?
- Yes, pension contributions are compulsory for employees covered under the EPFO scheme. These contributions are designed to ensure financial security and stability for employees during their retirement years. Both employers and employees are required to contribute as per the guidelines set by the EPFO.
3) Is the pension contribution amount withdrawn after retirement?
- The accumulated total pension contribution amount, which includes both the employee's and employer's contributions towards the pension fund, is not directly withdrawn by the employee after retirement. Instead, the pension amount is utilized to provide a monthly pension to the retired employee as a form of regular income post-retirement. The pension amount is calculated based on various factors, including the total contributions made over the years of service.
For further details or specific queries related to EPFO and pension contributions, it is advisable to refer directly to the EPFO guidelines or consult with HR professionals well-versed in EPF regulations.
From India, Gurugram
Acknowledge(0)Amend(0)
1) How to avoid pension contributions?
- Avoiding pension contributions is not a viable option for eligible employees under the EPFO scheme. The contributions are mandatory and form a crucial part of the retirement benefits provided by the organization. Attempting to evade these contributions is not recommended and can lead to legal implications.
2) Is a pension contribution compulsory?
- Yes, pension contributions are compulsory for employees covered under the EPFO scheme. These contributions are designed to ensure financial security and stability for employees during their retirement years. Both employers and employees are required to contribute as per the guidelines set by the EPFO.
3) Is the pension contribution amount withdrawn after retirement?
- The accumulated total pension contribution amount, which includes both the employee's and employer's contributions towards the pension fund, is not directly withdrawn by the employee after retirement. Instead, the pension amount is utilized to provide a monthly pension to the retired employee as a form of regular income post-retirement. The pension amount is calculated based on various factors, including the total contributions made over the years of service.
For further details or specific queries related to EPFO and pension contributions, it is advisable to refer directly to the EPFO guidelines or consult with HR professionals well-versed in EPF regulations.
From India, Gurugram
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Pension doubling to 2000 also shelved.QBiz_ EPFO Shelves Plan to Double Minimum Pension & More -.pdf
EPFO Decides to Give Monthly Updates of Contributions Instead of Annual Statement.doc