Understanding EPFO Pension Rules: This is how much money you will get at age 58; early pension rules and other key details explained
If your age is between 50-58 years, you are eligible for the early pension scheme. The earlier you withdraw your money before the age of 58, your pension will be reduced by 4 per cent for every year.
Employee Pension Scheme (EPF) is a good option to safeguard one's future financially. Employees’ Provident Fund Organisation (EPFO) provides an opportunity to subscribers for a pension after retirement. The EPFO scheme provides pensions to its members after the age of 58. Read on to learn about the applicable rules in detail to plan your post-retirement life better.
Early pension rules
However, some members want an early pension and there are some rules to get an early pension.
What is an early pension?
For early pension under the EPFO scheme, a member should be 50 years old. However, for a regular pension, the age should be 58 years.
What if someone wants a pension after 58?
If an EPFO member defers pension for two more years, he/she will get an additional benefit of 4 per cent per year.
Eligibility to get pension
One of the requirements to get EPF benefits is - one needs to complete 10 years of service.
How much amount you will get before 58 in EPF?
If your age is between 50-58 years, you are eligible for the early pension scheme. The earlier you withdraw your money before the age of 58, your pension will be reduced by 4 per cent for every year.
Understand with an example
Suppose an EPFO member decides to withdraw the reduced monthly pension at the age of 56 years, he will get 92 per cent (100 per cent–2×4) of the basic pension amount.
How to avail of early pension?
To avail of early pension, you will have to fill out the composite claim form and select the option of form and 10D for early pension.
What if your service tenure is less than 10 years?
If your employment period is less than 10 years and after that, you have not made any contribution to EPFO, then you are not entitled to get a pension.
What is the option in that situation?
In such a situation you have two options. First- If you do not want to do a job, then you can withdraw the pension amount along with the PF amount.
What is the second option?
The second option is that if you think that you will join the job again in the future, then you can take a pension scheme certificate. In such a situation, whenever you join a new job, you can link your previous pension account to the new job through this certificate. With this, the shortfall in the 10 years of employment can be compensated in the next job and become eligible for pension at the age of 58.