Learn the steps to cashing out your EPF retirement savings.

2023-01-23 07:26:08 - Grace Browns Grace Browns has been a lifestyle, fashion, and beauty writer for over 5 years, and she currently serves as a senior editor at 422346.com.

You and your employer each put money into your Employee Provident Fund (EPF) account on a monthly basis. The EPF account will receive 100% of your contribution. But a portion of your employer's contribution also goes into your pension account. So, you may have pondered at some point in your working life, Can I withdraw my pension contribution online?  

You're not the only one to wonder this; it's a common one. But before we go ahead and decide how to withdraw the pension from your account, it is important to understand the nitty-gritty details, such as —

  • Where does the money from your pension go when you retire?
  • The amount actually given for this cause
  • When can you begin making pension withdrawals?  

Let's take a look at these factors and the process for taking out your pension payment online.

EPS stands for "Employee Pension Scheme."

Exactly there is where your pension money will be invested. It is a common misconception that your pension contributions will be automatically deposited into your EPF account each month. Substitute the EPS account as the destination. If you join the EPFO (Employees' Provident Fund Organisation), you'll get this account set up for you as well.

Workers in the organized economy can participate in the EPS. The plan's primary objective is to give retirees security in the form of a pension for these workers. A person who has an EPFO account also has an EPS account. As a result, your EPS account will grow a little bit every month, eventually becoming a sizable nest egg for your retirement pension.  

Who and how much puts money into your EPS account?

To clear up yet another myth, the employee makes no financial contribution to the EPS account. Just the boss does Take a look at how the breakup plays out  

In this case, your pay won't go above and beyond your base salary and dearness allowance. Contrarily, in the 8 33% of earnings are deposited into an EPS account, with a ceiling of Rs Costing $1,250 per month

Withdrawal eligibility for pension contributions when

Withdrawals from pensions are permitted under a wide variety of conditions. The details of each of these cases are discussed below.

1. When your service record is less than ten years long.

With less than 10 years but more than 6 months of service, you are eligible to take your pension contribution in EPS. However, you can only do this if you've been jobless for at least 2 months.  

50 years of age, 10 years of service

To qualify for an early pension payout, you must have worked for the company for at least 10 years and be at least 50 years old. But in this case, your pension will be reduced. For every year before you turn 58, your pension rate drops by 4 percent.

An early pension withdrawal at age 54, for instance, would result in a payout of only 84% of the full pension you would have been entitled to. The 16% decrease in rates — at 4% for 4 years — is responsible for this.

Upon reaching age 58 and ten years of service, you are eligible for retirement.

Here, you're entitled to receive the full monthly pension payout. Getting your monthly pension check requires following the proper procedures. To be continued in the next section.

(4) If you're 58 years old but have less than 10 years of service completed

It's possible for some people to reach the retirement age of 58 without having accumulated the required 10 years of service for eligibility. This is the case if they wait until they are 48 years old or later to enter the organized sector. Consequently, the worker will not be entitled to a pension payment each month.

Still, if this describes you, have no fear. After reaching age 58, you can continue to access your entire EPS balance without penalty. While you won't be getting regular payments, you can take the entire fund out at once.  

Instructions for Withdrawing Your Pension Payment

You can request a pension withdrawal by submitting either of these forms and the required supporting paperwork.  

Form 10C

This form is to be used if you wish to withdraw your pension contribution prior to reaching 10 years of service.

Form 10D

If you are 50 or older and withdrawing a monthly pension payment, you should use this form.

Withdrawing your pension contribution follows a straightforward procedure. In order to assist you, we have prepared the following detailed instructions.  

Going to the EPFO's website is the first step.

Second, enter your UAN and password to access the portal.

Follow Step 3 and click on the 'online services' link.  

Step 4: From the drop-down menu, select the appropriate form for you to complete, either a Form 10C or a Form 10D.

Check your employment information, employment status, and other Know Your Customer requirements in Step 5.  

Sixth, sign the agreement and fill in the last four digits of your bank account.

Here's Step 7: Pick the Right Pension Withdrawal Plan for You

Eighth, opt for the Aadhaar One-Time Password.

The ninth step is to use the one-time password (OTP) sent to your Aadhaar-linked phone.  

The tenth action is to select "Validate OTP and Submit Claim Form."  

Okay, that's all there is to it If all of the information you have entered is correct and complete, you will then receive the money that is rightfully yours.  

Summing up

In the end, it's best to hold on to your pension until retirement so you have a reliable source of income in your golden years. If you take money out of your retirement fund before you need it, you'll reduce your nest egg and have to find other ways to pay for your retirement. That being said, withdrawing from your retirement account should be avoided unless absolutely necessary.  

Questions and Answers (FAQs)

While I'm still employed, am I able to access my pension?

When you're on the clock, you can't access the money in your EPS account. In contrast, if you have less than 10 years of service but more than 6 months of service and are unemployed for more than 2 months, you can withdraw money from your EPS account. However, if you have 10 years of service, you won't be able to collect your pension until you're 58 (or 50 if you're fine with a smaller payout).  

Is it possible to get my hands on my EPF retirement savings without quitting my job?

Unless you're leaving your current job, you can't get your pension money out. If you have less than 10 years of service but more than 6 months of service, you can withdraw your pension amount if you are unemployed for 2 months or more.

3 How do I get money out of my pension?

Make sure all of your previous PF accounts have been merged into your EPF account before you begin withdrawing your pension. After that, you can take money out of your pension in two different ways:

a The Aadhar Card can be used to access your PF and EPS funds.

  1. Sign up for a Universal Account Number (UAN) and make it active.
  2. Register for a UAN by providing your bank account information and Aadhar card number on the UAN website.
  3. Give your employer a completed Form 11 (revised).
  4. Send a cancelled check and a completed Composite Claim Form (Aadhar) to the appropriate EPFO office.

b Withdraw PF and EPS Funds without an Aadhar Card

  1. If you need to file a Form 15G or 15H, please submit two copies.
  2. If your service time has been less than five years, please provide your PAN card number.
  3. Submit your PF account number in lieu of a UAN if you do not have a UAN.
  4. Fill out a Composite Claim Form (Non-Aadhar) and take it to the EPFO office that handles your state.

To what extent am I able to access my pension fund contributions?

You can easily access your pension funds once you reach retirement age. Early withdrawal options are available in some circumstances.

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