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How to Withdraw Pension Contribution in EPF Online?
Table of Content
1. What is the Employee Pension Scheme (EPS)?
2. What is Employees’ Pension Scheme (EPS)?
3. How to Withdraw Pension Contribution in EPF?
4. How to Withdraw Pension Contribution Offline?
5. Documents Required to Withdraw Your Pension Contribution
6. What are the Eligibility Criteria to Withdraw Contribution from EPF?
7. When Can You Withdraw Your Pension Contributions?
8. How is Pension Amount Calculated Under EPS?
9. EPF Pension Withdrawal Rules
10. Benefits of Withdrawing EPF Online
11. How to Withdraw EPF for a Deceased Person?
12. Conclusion
What is the Employee Pension Scheme (EPS)?
Firstly, to understand how to withdraw pension contributions in EPF online, it is important to understand what EPS is. The EPS or Employee Pension Scheme is known as a social security initiative that is offered by the EPFO or the Employees' Provident Fund Organisation. This scheme aims to help employees in different industrial sectors get pensions after they retire from their jobs. To avail these benefits, an employee is required to complete a minimum of 10 years in their service. Moreover, the EPS scheme is available for both new and existing members of EPF in the market.
It is generally noticed that the employee and the employer contribute 12% of the pay an employee receives, where the total share of the employee goes towards the EPF. Now, 8.33% of the employer's share goes towards the EPS (Employees' Pension Scheme) and the rest 3.67% gets allocated to the EPF each month.
You must understand that as you plan for your financial future, considering other investment options such as mutual funds, fixed deposits or others will be fruitful. Solely depending on the returns of EPS might not be sufficient in the long run after your retirement. So, efficient retirement planning is necessary while generating the necessary corpus for the future.
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 in EPF?
Withdrawing the pension contribution in your Employees Provident Fund is easy and can be done using both online and offline modes. To get detailed steps on how to withdraw pension contribution in EPF, check the following section:
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: Open the portal of Unified Member Sewa in your browser and log in to your account using your UAN (Universal Account Number) and password.
Step 2: Navigate to the option of 'Online Service' and click on the 'Claim (Form - 31, 19 10C & 10D)' option.
Step 3: On the screen, you will get all the details related to the member, KYC and other necessary service details.
Step 4: Now, you need to enter your bank account number and select the ‘Verify’ option.
Step 5: Navigate and click on the 'Withdraw Pension Only' claim type option.
Step 6: From the menu, navigate to the 'I want to apply for' option and click on the 'Only Pension Withdrawal (Form 10C)' option.
Step 7: In the provided Form 10C, enter your permanent address and tick on the section of the disclaimer.
Step 8: No, select the option of ‘Get Aadhaar OTP’. Once you select this option, an OTP will be sent to your mobile number linked with an Aadhaar card.
Step 9: Enter the OTP and click on ‘Validate OTP’.
Step 10: Click on the 'Submit Claim Form' option.
Thus, in this way, you will get to withdraw your pension contribution from EPF online.
How To Withdraw Pension Contribution Online?
Here’s a detailed guide outlining the steps that you need to follow to withdraw your pension corpus online.
- 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
The following list of documents has to be submitted to your EPFO regional office to withdraw your pension corpus.
- A duly filled Form 10C if you haven’t completed 10 years of service
- A duly filled Form 10D if you’ve reached 50 or 58 years of age
- A copy of your proof of identity
- A copy of your proof of address
- A copy of your latest bank account statement
- Two revenue stamps
What are the Eligibility Criteria to Withdraw Contribution from EPF?
When you think about retirement investment, you come across schemes like NPS (National Pension Scheme), PPF, ULIP, life insurance and also EPF. Once you invest in any of the schemes, it is most likely that you need to withdraw the sum at some point in life.
To withdraw your contribution from the EPF, you need to fulfil certain eligibility criteria. Hence, such eligibility to withdraw pension contribution in EPF is discussed as follows:
- Only once the employee retires may the entire amount accrued in the employee's employee savings plan (note that early retirement is also feasible only after 55 years of age and not before that).
- Workers are required to have their Aadhaar and PAN details seeded into the EPF database, along with their active UAN, bank account details connected to it, and other pertinent information.
- Before 1 year of retirement, employees are eligible to withdraw 90% of their EPF capital.
- In light of the COVID-19 pandemic and other scenarios in which a nationwide lockdown may occur, EPFO has permitted the withdrawal of EPF if an employee loses their job before retirement as a result of a lockdown or layoff.
- Workers can apply online for clearance from their employers to withdraw their EPF funds if they have linked their UAN and Aadhaar to their EPF account.
- According to the EPFO's new regulations, only 75% of the whole EPF corpus may be taken following a month of unemployment; the remaining portion will be transferred to the new EPF upon employment.
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: You’ve reached 58 years of age and completed 10 years of service
Scenario 2: You’ve reached 58 years of age but haven’t completed 10 years of service
Scenario 3: You’ve reached 50 years of age and completed 10 years of service
Scenario 4: You have neither attained 50 years of age nor completed 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.
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.
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)].
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
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.
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
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.
- 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.
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:
Benefits of Withdrawing EPF Online
There are several ways of creating a retirement corpus such as annuity planning, fixed deposits, etc. Among them, EPF is well appreciated among individuals due to the inclusion of the employer's contribution. As you already know how to withdraw PF pension amount online, it is important to know the main advantages of online EPF withdrawals:
Expedited Processing Time
Easy Withdrawal Procedure
Convenient Accessibility
Real-Time Transaction Updates
Enhanced User Experience
The quicker processing time is one of the biggest advantages of withdrawing EPF online. In the past, there were several approvals and paper documents involved in the process, which frequently caused delays. The online method allows for significantly quicker processing of claims and quicker crediting of monies to the member's account.
The EPF withdrawal procedure may be easily accessed and utilised online. Members may quickly submit their withdrawal requests without help by using a streamlined form and clear instructions. EPF holders can further benefit from the reduction of paperwork and the ability to follow the progress of their claims online.
Members have the freedom to start and monitor their withdrawal requests from any location with an internet connection by utilising the EPF portal online. For those who are unable to visit the EPF office because of time or geographic restrictions, this is quite useful.
Real-time information on the claim's progress is available through online EPF withdrawal. Members are able to monitor the whole application process, from submission to approval and payment. Members will always be aware of the progress of their withdrawal request thanks to this openness.
The overall experience of withdrawing EPF funds has improved significantly with the online system. The elimination of physical visits, reduced paperwork, and faster processing times contribute to a more positive user experience. Additionally, the availability of customer support through online channels further enhances the convenience for members. Moreover, by submitting Form 15G, you can also ensure that no TDS gets deducted from the EPF interest earned, helping you to get an improved experience of this plan.
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.
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 guaranteed3 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.
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
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