Employee pension scheme withdrawal rules: when can you claim pension

 The employee pension scheme (EPS) is a crucial social security benefit offered to employees across India, ensuring financial stability post-retirement. It provides a regular pension after the employee attains a certain age or under specified conditions. Additionally, the introduction of the unified pension scheme has brought greater clarity and uniformity in pension benefits across different employment sectors. Understanding the withdrawal rules under these schemes is vital for planning your retirement well.


When can you claim pension under employee pension scheme


You are eligible to claim the pension under Employee Pension Scheme only after fulfilling specific conditions:


- Attained the age of 58 years (can be deferred up to 65 years for higher pension accumulation).

- Have completed at least 10 years of eligible service in the EPS.

- In case of early exit before 10 years of service, you can withdraw the contributions but will not be entitled to a monthly pension.


Employees can choose to defer the pension beyond 58 years to increase the monthly amount. However, in the case of voluntary exit before 10 years, the pension benefits lapse; only the employee's contribution is refunded.


Withdrawal rules before pension eligibility


If an employee leaves the job or withdraws before completing 10 years of service, the rules are as follows:


- The employee can withdraw the full amount of his/her own contributions along with interest.

- The employer’s contribution to EPS is non-refundable and remains with the EPFO.

- Employees with less than 10 years of service will not receive a pension; however, they can invest the withdrawn amount wisely to create a retirement corpus.

  

The unified pension scheme also allows transfer of benefits when changing jobs, ensuring pension continuity across employment stints.


How to apply for pension withdrawal


To claim pension benefits under EPS, follow these steps:


1. Fill Form 10D available on the EPFO portal or at the regional EPFO office.

2. Submit necessary identity documents like Aadhaar and bank details.

3. Ensure your EPF account is updated with accurate personal details.

4. For withdrawals before pension eligibility, Form 10C is applicable.

5. For pension withdrawal due to death or disability, the process requires additional documentation.


Once approved, pension payments start regularly into the registered bank account.


Conclusion


The employee pension scheme remains a cornerstone of social security for employees in India. Knowing the withdrawal rules, eligibility criteria, and procedures helps in optimising pension benefits effectively. Alongside this, the unified pension scheme ensures portability and uniformity of benefits across employers. To enhance your retirement income beyond these schemes, investing in Bajaj Finance FD is a prudent choice. With attractive interest rates that cater specifically to senior citizens and non-senior members, these fixed deposits can amplify your pension income and provide financial stability in later years.

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