PF Pension Withdrawal

Table of Content

1. What is the Employee Pension Scheme (EPS)?

2. How is the Pension Amount Calculated under EPS?

3. Secure Your Retirement with Our Pension Plans

4. What is Employees’ Pension Scheme (EPS)?

5. How to Withdraw Pension Contribution Online?

6. How to Withdraw Pension Contribution Offline?

7. Documents Required to Withdraw Your Pension Contribution

8. How Much Money Can You Take Out from Your EPF Account?

9. What are the Eligibility Criteria to Withdraw a Contribution from EPF?

10. When Can You Withdraw Your Pension Contributions?

11. How is Pension Amount Calculated Under EPS?

12. EPF Pension Withdrawal Rules

13. Benefits of Withdrawing EPF Online

14. How to Withdraw EPF for a Deceased Person?

15. Life Insurance & Retirement Planning

16. Conclusion

17. FAQs on How to Withdraw Pension Contribution

What is the Employee Pension Scheme (EPS)?

The Employee Pension Scheme (EPS) is a crucial retirement benefit plan designed specifically by the Employees Provident Fund Organisation (EPFO). By applying for this scheme, employees employed in the private sector receive a monthly post-retirement pension. 

EPS links closely with your EPF account. Both you and your employer might contribute about 12% of your salary towards EPF, but a significant portion of the employer's share contributes towards EPS. You will be eligible to receive pension benefits after completion of 10 years of service and will soon receive your pension once you reach the age of 58. 

EPS provides financial assistance post-retirement, maintaining a modest pension amount. Choose retirement planning wisely using options of fixed deposits, mutual funds, and public provident fund, so that you can build up a secure future.

How is the Pension Amount Calculated under EPS?

Gaining an understanding of pension amount calculation under EPS is essential for proper planning of your retirement. Staying well informed about your expected monthly pension enables you to make informed decisions and secure your future once you retire. 

Following the EPF law, the formula for calculating of EPS pension is as follows:

Monthly Pension = (Pensionable Salary*Pensionable Service Period)/70

• Pensionable Salary

The pensionable salary means the average basic salary of an individual for 5 years from time of retirement. It considers the basic salary only and dearness allowances (DA), and not other bonuses and allowances. 

1. If your salary is Rs. 15,000 per month, then only Rs. 15,000 is taken into consideration for calculation 

2. For instance, if your salary on average is Rs. 12,000 over the last 60 months, it indicates your pensionable salary.

• Service Period

The pensionable service period means the working tenure of an employee while he/she keeps on contributing to the respective EPS and EPF account. The formula for calculation of EPS pension underwent revision by the EPFO in 2014. Prior to this, the average basic salary during the last one year was the pensionable salary.

Let's consider a real-life example. Suppose, Ritesh enrolled in EPS scheme during January 2010, and then he quit working during February 2025. Thus, till August 2014, the employment span was 4 years and 7 months. Remaining, considering from September 2014 till February 2025, the employment span was 10 years and 5 months. Now, let's assume that the pensionable wage till August 2014 of Ritesh was Rs. 6500, and from September 2014, the pension amount was Rs. 15,000. 

Considering this, the pension amount calculation between the period of January 2010 and August 2014 will be (Rs. 6500*5 years)/70 = Rs. 464.28

On the other hand, the pension amount calculation between September 2014 and February 2025 will be (Rs. 15000*10 years)/70 = Rs. 2,142.85 

Thus, the total pension amount to be paid to you will be (Rs. 464.28 + Rs. 2,142.85) = Rs. 2607.13.

What is Employees’ Pension Scheme (EPS)?

The Employees’ Pension Scheme is a social security scheme that aims to provide eligible employees with a fixed sum of money each month as a pension after their retirement. Under the scheme, the employer is required to contribute about 8.33% of an employee’s salary each month. The employee, on the other hand, does not contribute any part of their salary towards the scheme.

How to Withdraw Pension Contribution Online?
 

Here is a detailed guide on the steps on how to withdraw PF pension amount online mode:

Step 1: 

Visit the official EPFO website.

Step 2: 

Click on the ‘For Employees’ option under the ‘Services’ tab.

Step 3: 

Click on the ‘Member UAN/Online Service (OCS/OTCP)’ option under the ‘Services’ tab on the new webpage.

Step 4: 

Log into your account using your Universal Account Number (UAN) and your password.

Step 5: 

Click ‘Online Services’ and then on the Claim option.

Step 6:

Select the form that applies to you. Use Form 10C if you haven’t completed 10 years of service otherwise use Form 10D.

Step 7: 

Proceed to fill out the form entirely.

Step 8: 

Check the details and status of your employment.

Step 9:

Enter the last 4 digits of your bank account number and click ‘Verify’.

Step 10: 

Click on the ‘Yes’ option to sign the certificate.

Step 11:

Select the pension withdrawal mode.

Step 12: 

Choose the ‘Aadhaar OTP’ mode of verification.

Step 13: 

Enter the OTP that you receive on the mobile number linked with your Aadhaar.

Step 14:

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

Your pension withdrawal request will be placed. After due verification, your pension will be credited to the linked bank account within a few days.

How to Withdraw Pension Contribution Offline?

Now that you know how to withdraw pension contributions online, it is time to learn to withdraw from different types of pension plans in offline mode. Here are the steps to follow for offline pension withdrawal:

Step 1:

Visit the website of EPF and download the composite claim form (Non-Aadhar or Aadhar Card).

Step 2:

Individuals applying with the help of the Composite Claim Form need to share their bank account details and link the Aadhar account number with the primary account number.

It is important to note that the activation of the same shall be done using the portal.

Step 3:

Individuals applying with the help of a Composite Claim Form (Non-Aadhar) have to do the Aadhar seeding.

Step 4:

Lastly, submit the form to the jurisdictional EPF Office after filing all the necessary details.

Documents Required to Withdraw Your Pension Contribution

For easy withdrawal of your pension contribution, submission of the following documents is mandatory. You can submit all these documents online by visiting the EPFO portal and offline at your nearest EPFO regional office. 

Here is the list of documents mandatory to submit for EPFO pension withdrawal:

• Form 10C: If you have not finished serving 10 years of service

• Form 10D: If you have attained the age of 50 or 58

• Proof of address

• Identity proof (e.g., PAN card and Aadhaar card)

• Latest statement of your bank account

• Two revenue stamps

Make sure all these details are accurate and consistent to avoid delays in processing.

How Much Money Can You Take Out from Your EPF Account?

Withdrawing money from your EPF (Employees Provident Fund) is easier under certain conditions that include unemployment, retirement, and other needs, such as purchasing a house or in medical emergencies. The amount you wish to withdraw depends on specific reasons, years of service, and balance maintained in your EPF account. 

The table below showcases the conditions under which you can withdraw EPF and the limit for withdrawal:

What are the Eligibility Criteria to Withdraw a Contribution from EPF?

Individuals must meet the desired eligibility criteria for partial withdrawal and final settlement on their respective EPF accounts. Let's look into the eligibility conditions necessary to meet for withdrawal of the contributed amount from EPF:

• Eligibility for Full EPF Withdrawal Upon Retirement

To withdraw the full EPF amount, an employee should attain the retirement age of 58 years. Reaching this age, they are eligible for withdrawal of the entire contributed amount, including the share and interest of the employer. After retirement, however, there are no penalties charged on the withdrawal amount. 

• Mandatory KYC and UAN Requirements

For EPF pension withdrawal, make sure to activate your Universal Account Number (UAN) and link it with your PAN and bank account. The KYC process is mandatory to complete for both the online and offline processes of withdrawal. Without proper verification of KYC details, the withdrawal request might be rejected. 

• Advance Withdrawal Option Before Retirement (90% Rule)

If you have an EPF account, you are eligible for withdrawal of about 90% of the accumulated balance upon attaining 54 years of age. This way, you can attain your financial needs before retiring. 

• EPF Withdrawal in Case of Job Loss Due to National Emergencies

Under cases of natural calamities, lockdowns, and pandemics, people who have become unemployed or facing financial hardship can apply for a withdrawal amount from their respective EPF account. Such withdrawals are, however, allowed under special provisions launched by the government during emergency scenarios. 

• Online EPF Withdrawal Facility with Employer Approval

Employees are eligible to submit withdrawal requests online through the EPFO portal using UAN. However, approval of the employer is equally necessary unless the KYC of the employee is verified fully and Aadhaar is linked with UAN. 

• EPF Withdrawal Rules During Unemployment (75% Withdrawal Clause)

If an employee remains unemployed for more than one month, they are eligible to withdraw approximately 75% of the balance maintained in the EPF account. The remaining 25% can be withdrawn if the employee is unemployed for two months or more. This opportunity thereby provides financial assistance during job transition.

When Can You Withdraw Your Pension Contributions?

According to the rules of the Employees’ Pension Scheme, pension corpus can only be withdrawn under certain specific scenarios.

• Scenario 1: Age 58 or above + 10 years of service

In this scenario, you can withdraw 100% of your pension corpus either as a lump sum amount or as a monthly pension.

• Scenario 2: Age 58 or above + less than 10 years of service

You may face such a scenario if you become an employee of the organised sector late in your life. Even in such a scenario, you will still be eligible to withdraw 100% of your pension corpus but only as a lump sum amount.

• Scenario 3: Age 50 or above + 10 years of service

In this case, you can withdraw your pension early. However, you will receive a reduced pension amount. Your pension will reduce by 4% multiplied by the number of years left till you attain 58 years of age. For instance, if you’re 52 years old and want to withdraw your pension corpus, your pension will be reduced by about 24% [4% x (58 years - 52 years)].

• Scenario 4: Age below 50 + under 10 years of service

In this scenario, you can withdraw your pension corpus only if you’ve completed at least 6 months of service and been unemployed for 2 months.

How is Pension Amount Calculated Under EPS?

As of now, you have understood how to withdraw pension contribution, but you must also have an idea how to calculate the same. The amount of pension in your provident fund depends on the pensionable service and also the pensionable salary of the individual. The monthly pension of an individual is calculated according to the EPF pension calculator formula or EPS formula as stated below:

Member’s Monthly Pension = (Pensionable Salary x Pensionable Service) / 70

• Pensionable Salary

The average monthly income for the final 60 months before an employee departs from the Employees' Pension Scheme (EPS) is referred to as their pensionable wage. The employee continues to receive the relevant benefits even if there were any non-contributory periods during the previous 60 months. The non-contributory days are not calculated.

For example, if a person starts work on the fifth of the month and gets paid Rs. 18,000 every month, their salary for 26 days would be Rs. 15,600 (four days' worth of Rs. 600 less per day). However, the monthly compensation of Rs. 18,000, or 30 days, would still be taken into account for the EPS.

The maximum pensionable salary is capped at Rs. 18,000 per month. The employer contributes 8.33% of this salary to the employee's EPS account. Therefore, the monthly contribution to the employee's EPS account is calculated as follows:

Member’s Monthly Pension = Rs. 18000 x 8.33/100 = Rs. 1499.4

• Service Period

  The time a member is considered eligible for a pension is determined by the actual length of service they have completed. This term is computed by adding up service time from many employers. An EPS Scheme Certificate must be obtained and given to the new employer each time an employee changes positions. It's significant to remember that the employee is eligible for a 3-year bonus after reaching 15 years of service.
  

A member's service time will be reset to zero if they leave the EPS fund before completing their five-year service period and subsequently join another organisation. In this case, they will need to start contributing to the EPS account. Every six months, the amount of time spent in pensionable service is evaluated.

There is a six-month minimum pensionable service requirement. For example, the pensionable service time is 7 years if the service duration is 7 years and 3 months. On the other hand, it is regarded as 8 years if the service time is 7 years and 9 months.

EPF Pension Withdrawal Rules

As you already know how to withdraw pension contribution, it is time to get aligned with the withdrawal rules to follow for your EPF pension. Employee Pension Fund is generally availed to create a retirement corpus. Thus, withdrawals in this case are expected to be prevented unless it is highly necessary. Nonetheless, you may find yourself withdrawing the sum due to an expected emergency from your EPF account and thus it is necessary to keep in mind a few rules. 

Check the following pointers to get acquainted with the EPF pension withdrawal rules to avoid any hassle.

• Taxes apply to Provident Fund withdrawals made within five years after account inception. However, if the amount of your withdrawal is less than Rs. 50,000, there won't be any TDS.
• You can apply for a loan (partial withdrawal) on your employee provident fund.
• The regulations prohibit taking money out of a position where you are currently employed, including the Provident Fund balance.
• When you switch jobs, you don't have to take out your provident fund since you may simply transfer it to a new account online.

Now, by considering the PF withdrawals of employees at an early stage, the Indian Government made some amendments in 2016 related to employee provident fund. The amendments that were made towards advance withdrawal rules of PF are:

• 90% balance of the Employee Provident Fund can be withdrawn after attaining the age of 54 years.
• After an individual quits their job, an individual can withdraw 75% of the total PF balance if he stays unemployed for the next 1 month and the remaining 25% can be withdrawn after remaining unemployed in the 2nd month as well.

Benefits of Withdrawing EPF Online

EPF pension withdrawal online provides numerous advantages, making the whole process easier, faster, and convenient. Here are the primary benefits of how to withdraw the PF pension amount online:

• Faster Processing

Faster processing is the primary benefit of withdrawal of PF pension withdrawal online. Earlier, there was involvement in the submission of several paper documents, leading to a delay in the process. The online method, however, enables quick processing of claims. 

• Easy Withdrawal Procedure

The withdrawal process, followed online, is simple, convenient, and user-friendly. With a clear guideline and following step by step procedure on the EPF portal, individual members can complete their withdrawal procedure without external help. The online process also reduces paperwork and makes the process hassle free. 

• Access Anytime, Anywhere

Tracking your EPF withdrawal process is easy. You can perform it from anywhere, even when there is no stable internet connection. This is extremely beneficial if you are residing far away from an EPF office or following a busy schedule. There is no need to visit your nearest EPF office physically or stand in long queues. 

• Real Time Transaction Updates

The EPF online portal provides real-time transaction updates stating the status of your claim, from submission to approval, and then proceeding towards payment. Maintaining this kind of transparency enables members to stay informed at each stage of the process and enables removing uncertainty. 

• Enhanced User Experience

The overall experience of users regarding EPF withdrawal has improved significantly. Less visit to the nearby EPF office, minimal paperwork and quick processing contributes towards a smooth and hassle-free experience. Online customer support is another convenient option. Under this process, submission of Form 15G online is applicable to prevent deductions of TDS on EPF interest, enabling you to save more. 

How to Withdraw EPF for a Deceased Person?

As per the rules of the Employees' Provident Fund Organisation (EPFO), it is mandatory for PF account holders to name a nominee for their account. This is because if the member faces an untimely demise, the nominee shall be entitled to receive the accumulated fund of the provident fund corpus.

Thus, to know how to withdraw a pension contribution in EPF for a deceased individual, follow the steps below:

Step 1:

Fill out the EPF Form 20 by entering all the nominee details as well as the PF member who is deceased.

Step 2:

You need to submit Form 20 with the help of the last employer of the PF member. If you download the form from an EPFO website, all the pages must be signed by the nominee as well as the employer.

Step 3:

After the application is submitted, the EPFO shall send an SMS to the claimant about the processing status of the form.

Once the claim gets approved, the nominee shall receive the money. It is important to note that the payment of the corpus shall be directly deposited in the claimant's bank account. Thus, it is necessary to attach a copy of your cancelled cheque or bank passbook where the details of the IFSC copy and account number are visible for NEFT payment. In case the total amount is less than Rs. 2,000, the money shall be transferred via money order.

Life Insurance & Retirement Planning

While EPF & EPS secure your retirement, life insurance (like Term Insurance or Pension Plans) ensures financial protection for your family. Combining EPF with insurance helps in:
✔ Debt-free retirement
✔ Emergency fund availability
✔ Tax-free maturity benefits

Consider investing in ULIPs, NPS, or annuity plans for higher post-retirement returns.

Conclusion

Overall, the employee pension scheme significantly helps you to create a financial corpus to use as a monetary security in times of need.  By pairing it with products like HDFC Life Pension Plans, you can achieve a more comprehensive and secure retirement strategy for those Guaranteed² returns post retirement.  

From this blog, we hope to share all the insights related to EPF and how to withdraw pension contribution using both online and offline modes. Make sure to plan your finances in a way that will be useful during emergencies as well as act as a retirement corpus.

FAQs on How to Withdraw Pension Contribution

Q: Can I withdraw my pension contribution amount?

Generally speaking, you cannot take out your whole pension contribution amount while employed. There are certain exceptions, though. You may be able to withdraw all or part of your pension contribution if you satisfy certain age and service requirements, or if you're jobless for a predetermined amount of time. In addition, you can access your pension funds following your pension scheme's regulations once you retire. 

Q: Can I withdraw my pension fund when I resign?

No, when you quit, you usually cannot take your full pension savings with you. Retirement savings are the purpose of pension funds. There are certain exceptions, though. Under some circumstances, such as unemployment, you may withdraw your payments if you have worked for fewer than ten years. An early departure with fewer rewards may be feasible for individuals who have served for longer than ten years. 

Q: Can I withdraw money from my pension?

A number of conditions must be met before you may take money out of your pension. Save in the case of a terminal illness, you are normally not allowed to access your pension savings if you are under 50. You may be eligible for reduced benefit early access if you are between the ages of 50 and 58. Generally speaking, you can take your pension early at age 58, however precise guidelines differ based on the kind and source of the pension. 

Q: How do I remove pension contributions?

Contributions to your pension may be deducted based on the nature of the pension and your unique circumstances. Using Form 10C, you can often withdraw your pension contribution if you haven't reached your ten years of service requirement. Form 10D applies to you if you are 50 or 58 years old. There may be other alternatives for withdrawal depending on things like joblessness or certain life situations. 

Q: Can I surrender my pension?

In most cases, you can give up your pension, but it's usually not a good idea. When you surrender, you often take your pension money in one large payment prior to retirement. A part is tax-free, while the remaining amount is not. You would also forfeit future pension income and any increase in your investments. When choosing a choice, take into account options like drawdown or pension loans.

Q: How do I claim my pension withdrawal?

To claim your pension withdrawal, make sure to submit the right form (Form 10C or Form 10D) along with other supporting documents to your nearest EPFO registered branch or online through the portal. 

Q: Is withdrawal from EPS taxable?

TDS is deducted at 10% on the required EPF balance if you withdraw the money within 5 years of service and if the required amount is more than Rs. 50,000. However, if you fail to provide the PAN card, TDS will be deducted at the rate of 20%.

Q: Who is eligible to become a member of the EPFO?

To become a member of the EPFO, the employee must be employed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.

Q: How does EPF differ from life insurance?

EPF is primarily a retirement savings scheme, while life insurance provides financial protection to dependents in case of the policyholder's death. While EDLI (Employees' Deposit Linked Insurance scheme) offers some life insurance benefits with your EPF, it's generally advisable to maintain separate comprehensive life insurance coverage.

Related Articles:

• How Much Will You Need Once You Retire?
• How to Calculate your Retirement Corpus
• Know the Right Time to Stop Saving For Retirement
• Pension Plan for NRI