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How to withdraw your pension contribution in EPF?

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How to withdraw your pension contribution in EPF?

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If you are an employee with a working EPF account, you may be aware that each month, you and your employer each contribute a specific sum to this account. All of your contribution goes to your Employees’ Provident Fund account. But in the case of your employer’s contribution, some of it also goes to your pension account. So, at some point during your career, you may have wondered — Can I withdraw my pension contribution online? 

This is a common question, and you’re not alone if you’ve thought about this. But before we go ahead and decide how to withdraw the pension from your account, it’s important to understand the finer details of how this works, such as —

  • Where does your pension amount actually go?
  • How much is actually contributed for this purpose?
  • And when can you withdraw your pension? 

Let’s check out these important aspects and see how to withdraw your pension contribution online.

Say hello to the Employee Pension Scheme (EPS)

That’s where your pension amount actually goes. Contrary to popular belief, the portion of your salary earmarked for pension does not go into your EPF account. Instead, it goes into the EPS account. This account is also automatically opened when you become a member of the Employees Provident Fund Organisation (EPFO).

The EPS is a scheme available to employees who are working in the organised sector. And its primary purpose is to ensure that these employees have a source of pension once they retire. If you have an EPFO account, it means that you also have an EPS account. And each month, some contribution is made to this EPS account — thereby building a corpus for your retirement pension. 

Who contributes to your EPS account, and how much?

To bust another common misconception, the employee does not contribute anything to the EPS account. Only the employer does. Here’s what the breakup looks like. 

Here, the salary is limited to the basic salary plus the dearness allowance. But in the case of the 8.33% contribution to the EPS account, the maximum limit is capped at Rs. 1,250 per month.

When can you withdraw your pension contribution?

There are many different scenarios where pension withdrawal is permitted. Here is a closer look at each of these scenarios.

1. When you have completed less than 10 years of service

If you have completed less than 10 years but more than 6 months of service, you can withdraw your pension contribution in EPS. However, this is only permitted if you have been unemployed for 2 months. 

2. When you have attained 50 years of age and completed 10 years of service 

If you have completed 10 years of service and attained 50 years of age, you can withdraw your pension early, before 58 years of age. However, in this case, you will receive a reduced pension only. The rate of pension is reduced by 4% for each year left till you attain 58 years of age.

For example, if you choose to withdraw an early pension at age 54, you will only receive 84% of your eligible pension amount. This is because of a 16% rate cut — at 4% for 4 years.

3. When you have attained 58 years of age and completed 10 years of service 

In this case, you are eligible for 100% of the pension amount, paid out on a monthly basis. You need to follow the due procedure to withdraw your monthly pension. We’ll discuss that in the next section.

4. When you have attained 58 years of age, but have not completed 10 years of service 

Some people may attain the retirement age of 58 years, but may not have 10 years of service to their credit. This happens if they join the organised sector later in life, after the age of 48. In such cases, the employee is not eligible for a monthly pension.

However, if you fall in this category, don’t worry. You can still withdraw the entire sum in your EPS account once you attain the age of 58. So, while you will not get the payouts on a monthly basis, you will be able to withdraw the corpus entirely, as a lump sum. 

How to withdraw your pension contribution?

To withdraw your pension, you need to submit any one of the following two forms, along with other necessary documents. 

Form 10C

In case you want to withdraw your pension contribution before completing 10 years of service, this form is applicable.

Form 10D

This form is applicable in the case of monthly pension withdrawal after 50 years (or 58 years, as the case may be).

The procedure to withdraw your pension contribution is fairly simple. Here is a step-by-step guide to help you with this. 

Step 1: Visit the official website of the EPFO.

Step 2: Log in to the portal using your UAN and password.

Step 3: Visit the ‘online services’ tab. 

Step 4: Choose and fill in the form applicable to you from the menu, from among Form 10C and Form 10D.

Step 5: Verify your employment details, employment status and other KYC norms. 

Step 6: Enter the last 4 digits of your bank account and affix your signature on the undertaking.

Step 7: Then, choose the pension withdrawal option applicable to you.

Step 8: Select the Aadhaar OTP option.

Step 9: Enter the OTP received on the number registered with your Aadhaar.  

Step 10: Click on the ‘Validate OTP and Submit Claim Form’ option. 

That’s it! You will then receive the amount due to you, provided the details you have entered are accurate and complete.  

Summing up

All things said and done, it is advisable to keep your pension amount intact till you retire, so you can enjoy a steady stream of income in your retired life. Withdrawing it earlier will erode your retirement corpus, and you will have to find other ways to fund your retirement. So, unless absolutely necessary, try not to break into your pension funds. 

Frequently Asked Questions (FAQs)

1. Can I withdraw my pension fund while working?

You cannot withdraw funds from your EPS account when you are actively working. However, if you have completed less than 10 years of service but more than 6 months of service, you can withdraw funds from your EPS account — provided you are unemployed for more than 2 months. But if you have completed 10 years of service, you will only be eligible for your pension benefits after you have completed 58 years of age (or 50 years, in case you are okay with receiving a reduced pension). 

2. Can I withdraw my pension contribution in EPF without leaving the job?

No, you cannot withdraw your pension contribution without leaving a job. You can only withdraw your pension amount if you are unemployed for a period of 2 or more months (provided you have completed less than 10 years but more than 6 months of service).

3. How can I withdraw money from my pension?

Before you withdraw your pension from your EPF account, make sure that all your PF accounts from your employers have been merged. You can then proceed to withdraw your pension in the following two ways -

a. Withdraw PF and the EPS with Aadhar Card

  1. Activate your UAN (Universal Account Number)
  2. Fill your bank account details and your Aadhar card number on the UAN portal.
  3. Submit a filled Form 11 (new) to your employer
  4. Submit a filled Composite Claim Form (Aadhar) to the concerned EPFO office along with a cancelled cheque.

b. Withdraw PF and the EPS without Aadhar Card

  1. Submit two copies of Form 15G/15H if applicable.
  2. Furnish your PAN card number if the service period has been less than five years.
  3. Furnish your UAN if available, if not, then submit your PF account number.
  4. Submit a filled Composite Claim Form (Non-Aadhar) to the concerned EPFO office.

4.Can I withdraw pension contribution?

On retirement you can withdraw your pension contribution with ease. In some cases you can opt in for for an earlier withdrawal as well.

Curious? Check these out

1. How to check PF balance online - Here are 4 ways

2. What are the requirements in the EPS scheme form

3. How to calculate the amount in your EPF account at retirement

4. Salary terms you should know before the end of the month

5. Salary structure components and how to calculate your salary

6. What is an ESOP? How do ESOPs work?

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