A pension plan is valuable financial support that makes you save money for your later years after you stop working. You can regularly contribute to this plan and receive consistent returns over an extended period. This fund grows to a substantial or adequate retirement fund. So, it is important to understand the specifics of your retirement plan and the process of withdrawing pension funds without complications.
What is EPF?
India’s government created the Employees Provident Fund Organisation (EPFO) to manage the Employees Provident Funds, which ensures financial stability for public and private sector employees after they retire. This retirement savings plan is created to ensure a safe financial future in old age. It is mandatory and receives financial support from contributions made by both the employer and the employee.
After you stop working, you can withdraw funds on a lump sum or monthly basis.
Pension fund beneficiaries can withdraw a lump sum of their retirement funds, usually up to one-third. The remaining advantages are given out in monthly installments.
What is Employees’ Pension Scheme (EPS)?
EPS is a part of EPF. The employee and employer deposit a set amount into the EPF account every month. Some of the money goes into your pension fund from the employer’s contribution. The EPFO has implemented the Employees’ Pension Scheme (EPS) as part of its employee social security initiatives. The Employees’ Pension Scheme is designed to offer retired employees a fixed amount of money on a monthly basis as a pension to provide social security. According to the plan, the employer must provide 8.33% of the employee’s monthly salary as a contribution to EPS; in contrast, the employee does not contribute any portion of their pay to this plan.
All employees who qualify for work: PF can be eligible for the Employee Pension Scheme (EPS). EPFO administers this scheme, which ensures that the employee will get a pension from the age of 58 years.
To qualify for this pension through EPS, you must have worked at least 10 years and be at a minimum age of 50 to access it prematurely.
In what conditions are you allowed to take out your pension contributions?
According to the Employees’ Pension Scheme regulations, the pension fund can only be withdrawn in particular designated situations.
• At the age of 58 years and you have served at least 10 years: In this situation, you can withdraw your entire pension fund as a one-time sum or as a monthly pension pay-out.
• You are 58 years old but have not yet fulfilled 10 years of service: If you enter the organised sector late in life, in that situation, you will still have the option to withdraw the entire pension fund, but only in a single lump sum amount.
• You have turned 50 and finished 10 years of work. In this situation, you can access your pension before the usual retirement age. You will be given a decreased pension payment. Your pension will decrease by 4% every year until you reach the age of 58. If you are 52 years old and wish to access your pension savings, you will face a decrease of around 24% in your pension amount, which means 4 multiplied by 6.
• You are younger than 50 and have yet to reach 10 years of service. In this situation, you are eligible to access your pension funds if you have served for a minimum of 6 months and are experiencing 2 month period of unemployment.
Documents needed for withdrawing your pension contribution
To withdraw your pension amount, you must submit the listed documents to your EPFO regional office:
• Submit a completed Form 10C if you still need to complete 10 years of service.
• A completely filled-out Form 10D is required for individuals who have turned either 50 or 58 years old.
• ID proof document required.
• Document verifying your current residence.
• A recent bank statement copy.
• A pair of revenue stamps.
The process of withdrawing pension contributions online
Here are the complete, detailed procedures you must follow to withdraw your pension fund online:
• First of all, open the authorised EPFO website.
• Then go to the ‘Services’ section, and under this section, select the option of ‘For Employees’.
• Click the ‘Member UAN/Online Service (OCS/OTCP)’ option.
• Sign in to your account with your Universal Account Number (UAN) and password.
• Select ‘Online Services’ and proceed to choose the ‘Claim’ option.
• Please select the relevant form (Form-31, 19, 10C, or 10D).
• Choose the correct reason for the withdrawal of your pension.
• Continue with the automatically completed form, which requires your details to verify the information and current situation of your job.
• Input the final 4 numbers of your bank account and select ‘Verify’.
• Then, choose the option for “Withdraw Pension Only.”.
• Choose “Only Pension Withdrawal (Form 10C)” from the “I want to apply for” tab.
• Provide your complete address in the specified section of Form 10C, and verify the disclaimer.
• Choose the “Get Aadhaar OTP” option to get a one-time password sent to your verified mobile number.
• Insert the OTP into the designated field and select the “Validate OTP” button.
• Press the “Submit Claim Form.”
Your request to withdraw your pension will be processed. Following verification, your pension will be deposited into the connected bank account in a few days.
The process for withdrawing pension contributions offline
You also have the option to withdraw your pension fund offline. If you want to go with the offline option, you should follow the instructions given below:
• Go to the EPFO website to obtain the composite claims form (with or without Aadhar).
• Download the form that is applicable to you.
• If you need to make a claim with Aadhaar, you must give your bank information, and your main bank account must be connected to your Aadhaar.
• If you are making a claim without Aadhaar, the form must be connected to your account number.
• Complete the form and include all required paperwork. Ensure that you have personally certified duplicates of your identification and address verification.
• Turn in the completed form and additional documents from the EPFO regional office that covers your area.
Conculsion.
EPF pension plays a crucial role in planning for retirement. It is quite true that this saved money enables you to enjoy your after-retirement life with financial stability and peace of mind. The main purpose of the Employees’ Pension Scheme (EPS) is to offer financial security after retirement. It is recommended to avoid taking out your savings until you have retired.
FAQs.
It is not possible to access your pension fund while still employed. But if you have been jobless for more than 2 months and have served more than 6 mont
If you take out all your money immediately, you must pay taxes on your EPS withdrawal.
If you have served for at least 10 years, you must complete the Composite Claim Form and Form 10C to withdraw pension contributions from EPF.