EPFO Pension: Big update for private employees, it is important to know these rules related to pension

New Delhi: Provident Fund (PF) amount is deducted every month from the salary of most of the employees working in the private sector, but many people do not have complete information about the rules of the Employee Pension Scheme (EPS). This is the reason why many employees have to face pension related problems at the time of changing jobs or retirement.

What is Employee Pension Scheme (EPS)?

Employees’ Pension Scheme is a social security scheme run by the Employees’ Provident Fund Organization (EPFO). Its objective is to provide monthly pension to private sector employees after retirement. This scheme is important for those employees who work in the organized sector for a long time.

Why is 10 years of service necessary?

The most important rule of this scheme is that the employee must have at least 10 years of pensionable service. If an employee leaves the job before completion of 10 years or does not continue his pensionable service, he does not get the benefit of regular monthly pension. Therefore, during change of job, the employee should transfer his PF account to the new company, so that the previous service also continues to be included in the pensionable period.

Don’t make this mistake while changing jobs

Many employees withdraw their old PF after getting a new job. Doing so may affect the continuity of their pensionable service. If the PF account is transferred, both the old and new services get integrated, making it easier to fulfill the 10 years of eligibility. Experts advise that unless there is extreme need, it is considered more beneficial to transfer PF instead of withdrawing it when changing jobs.

It is also necessary to complete the age of 58 years

Mere 10 years of service is not sufficient to receive regular monthly pension. The employee also has to complete 58 years of age. After this the eligible employees become entitled to receive monthly pension under EPS. That is, the benefit of pension will be available only when both the conditions of service period and age are fulfilled.

On what factors does the pension amount depend?

The monthly pension received under EPS depends on many factors. The main ones among these are pensionable service of the employee, fixed pensionable salary and rules of the scheme. Employees with long continuous service can get relatively higher pension benefits.