EPFO Pension Rules: The Employees’ Provident Fund Organization (EPFO) plays a vital role in securing the financial future of employees by promoting savings for retirement. Recently, EPFO has clarified its pension rules highlighting various aspects that affect the pension amount that subscribers will receive.
As per EPFO rules, an employee who has contributed to EPFO for at least 10 years becomes eligible for monthly pension on reaching the age of 58 years. However, opting to delay pension till the age of 60 increases the pension amount by approx.
EPFO also encourages subscribers to consider deferring pension till the age of 60, as this allows for higher contributions and higher returns later. Subscribers have the option to apply for early pension from the age of 50, provided they have completed a minimum of 10 years of service. However, choosing early pension option reduces the pension amount.
The reduction in pension is calculated at the rate of 4 per cent each year when the subscriber withdraws the pension before the age of 58 years. For example, if a subscriber opts for pension withdrawal at the age of 56, he or she will receive 92 per cent of the basic pension amount. Calculated as (100 percent 2 years ago – 58 x 4 percent).
Additionally, subscribers under the age of 50 who have completed 10 years of service are not eligible for pension benefits. On retirement, they will get only the amount deposited in their EPF account.
EPFO’s clarification aims to provide clarity and guidance to customers regarding their pension entitlements and options. By understanding the rules and taking informed decisions, employees can effectively plan for their retirement and secure their financial future.
