For private sector employees, the EPFO's pension scheme (EPS) is considered a major retirement security. PF is deducted every month, but there's often confusion about when and how much pension will be received. EPS rules are based on age, length of service, and salary limits, not market returns. Therefore, it's important to understand when pension eligibility becomes a priority and the conditions under which benefits are available.

When will private employees get lifetime pension? 

The EPFO's pension scheme, EPS, is crucial for millions of employees working in the private sector. While PF is deducted every month during employment, most employees don't understand when they will receive their pension, how much they will receive, and under what conditions. While the PF balance is shown in their passbook, pension calculations are based on rules and formulas. In recent years, EPFO ​​regulations, salary limits, and court orders have made EPS even more difficult to understand.

Minimum age and service requirements for EPFO ​​pension
Two essential conditions are essential for receiving a monthly pension under EPS. First, the employee must have completed at least 10 years of pensionable service, and second, they must be 58 years of age. Pensionable service here refers to the period during which the employer contributed to EPS and the employee transferred the contributions to PF, not withdrew them. Less than 10 years of service does not entitle them to a lifetime pension.

How money is deposited into EPS and the impact of the salary limit:
8.33% of the employee's PF contribution made by the employer is deposited into EPS. However, this contribution is based on a fixed salary limit. This means that no matter how high your actual salary is, the pension calculation does not increase beyond a certain limit. This is why even those with high salaries receive a limited pension and cannot expand it like an investment.

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What are the disadvantages of taking a pension at 50?
If an employee chooses to take a pension before the age of 58, i.e. after 50 years of age, this is considered early pension. In such a situation, the pension amount is permanently reduced. However, if an employee postpones taking a pension after 58 years of age and waits until 60, they may receive a slightly higher pension. This means that the timing of the pension directly affects your monthly benefit.

What pension benefits will be available if you leave your job before 10 years?
If an employee leaves the job before completing 10 years of service under EPS, they do not receive a monthly pension. In such cases, the EPFO ​​provides a one-time withdrawal benefit. This amount is determined based on a service table, which multiplies the pensionable salary by a factor determined by the years of service. This amount is usually limited and does not provide a substitute for a lifetime pension.

PC:News18