Hello, I have a query regarding EPF withdrawal with respect to EPS.
I request you to please correct me if I am wrong and resolve the stated query.
1) The employee can withdraw his/her EPS contribution after completion of 6 months of service.
1a) If so, how much of the amount can he withdraw considering that EPS is deducted keeping a salary of Rs 6,500 per month with a contribution capped at Rs 541. Therefore, for a period of minimum 6 months contribution, the total accumulated amount is approximately Rs 3250.
2) The employee can opt for a pension after completion of 9.5 years of service.
3) If this is so, is a gap of even 1 month in contribution acceptable, or will he be ineligible for a pension?
4) In the event the employee contributes to the EPF scheme but leaves before completion of 6 months of employment, what happens to his EPS? Is it forfeited, or can he claim it when he/she joins a new organization and opts for EPF?
5) Is there any minimum period of service for withdrawal of EPF?
Please clarify as I am quite confused about it.
Regards,
Anuradha
From India, Mumbai
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16I request you to please correct me if I am wrong and resolve the stated query.
1) The employee can withdraw his/her EPS contribution after completion of 6 months of service.
1a) If so, how much of the amount can he withdraw considering that EPS is deducted keeping a salary of Rs 6,500 per month with a contribution capped at Rs 541. Therefore, for a period of minimum 6 months contribution, the total accumulated amount is approximately Rs 3250.
2) The employee can opt for a pension after completion of 9.5 years of service.
3) If this is so, is a gap of even 1 month in contribution acceptable, or will he be ineligible for a pension?
4) In the event the employee contributes to the EPF scheme but leaves before completion of 6 months of employment, what happens to his EPS? Is it forfeited, or can he claim it when he/she joins a new organization and opts for EPF?
5) Is there any minimum period of service for withdrawal of EPF?
Please clarify as I am quite confused about it.
Regards,
Anuradha
From India, Mumbai
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Dear Anuradha,
For those who contributed to EPS for 6 months, they are eligible for withdrawal after cessation of service. The amount to be withdrawn is calculated as follows: 1.02 x 6500 = 6630.
For those who contributed to EPS for 9.5 years, they are eligible for a pension.
Non-contributory periods are not a reason for pension denial.
Service of less than 6 months in EPS is also transferable to future service.
For PF withdrawal, there is no minimum period.
Abbas P.S.
From India, Bangalore
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For those who contributed to EPS for 6 months, they are eligible for withdrawal after cessation of service. The amount to be withdrawn is calculated as follows: 1.02 x 6500 = 6630.
For those who contributed to EPS for 9.5 years, they are eligible for a pension.
Non-contributory periods are not a reason for pension denial.
Service of less than 6 months in EPS is also transferable to future service.
For PF withdrawal, there is no minimum period.
Abbas P.S.
From India, Bangalore
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Hi,
To become eligible for a pension, an employee has to complete 10 years of service as an EPS member. Otherwise, they are only eligible for a pension withdrawal benefit. An employee is allowed to draw a monthly reduced pension from a date earlier than 58 years of age but not earlier than 50 years of age. In such cases, the amount of pension shall be reduced at a rate of 3% for every year the age falls short of 58 years.
Thank you.
From India, Madras
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To become eligible for a pension, an employee has to complete 10 years of service as an EPS member. Otherwise, they are only eligible for a pension withdrawal benefit. An employee is allowed to draw a monthly reduced pension from a date earlier than 58 years of age but not earlier than 50 years of age. In such cases, the amount of pension shall be reduced at a rate of 3% for every year the age falls short of 58 years.
Thank you.
From India, Madras
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Dear friends, 1) Even though minimum service for EPS is 10 years, 9.5 years will be rounded upto 10 years. 2) In reduced pension, rate of reduction is 4% per annum, not 3% Abbas.P.S
From India, Bangalore
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From India, Bangalore
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Respected Abbas ji,
Thank you for the detailed response. However, please clarify pt1a).
I am unable to understand what is 1.02. In simple words, is it a factor or a calculated value and if so, how is it calculated. Also, what will be the EPS withdrawal formula for any person wanting to withdraw the EPS amount between 6 months to 9.5 years of service.
Also, what is the concept of pt 2 in your second post. I would also request you to suggest what happens to the EPS amount accumulated by such an employee who leaves an organization for less than 6 months of service.
Please help.
Thanking you,
Anuradha
From India, Mumbai
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Thank you for the detailed response. However, please clarify pt1a).
I am unable to understand what is 1.02. In simple words, is it a factor or a calculated value and if so, how is it calculated. Also, what will be the EPS withdrawal formula for any person wanting to withdraw the EPS amount between 6 months to 9.5 years of service.
Also, what is the concept of pt 2 in your second post. I would also request you to suggest what happens to the EPS amount accumulated by such an employee who leaves an organization for less than 6 months of service.
Please help.
Thanking you,
Anuradha
From India, Mumbai
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Dear Anuradha,
Though Mr Abbas has cleared most points (As he usually clarifies in all posts related to PF and Pension). However, for your further query and to make it more clear, pls note my points:-
1) The employee can withdraw his/her EPS contribution only after completing 06 months. Prior to that EPS contribution is being forfeited by the EPFO.
1a) After completion of 06 months the amount deposited towards EPS can be withdrawn fully. But EPFO don’t pay any interest on that contribution. Interest is being paid only on EPF Contributions. The calculation of the factor 1.02 is not clear to me as well. Why this is done on 6500/- is also need clarification. Lets wait for Mr Abbas valued suggestion/s.
2) 9.5 year service is eligible for pension and will be counted at 10 years while doing the Pension Calculation.
3) Same as suggested by Mr Abbas.
4) If employee worked for less than 6 months and opt for withdrawal of PF-EPS than the EPS amount will be forfeited by the EPFO (As I already cleared in my 1 Point). However, if the employee transfer his/her EPF-EPS in new organization and the total service cross 6 months. Than the employee can withdraw full EPS as well (subject to service less than 9.5 years).
5) There is no min service period limit for EPF withdrawal, subject to 06 months service. (less than 6 months service will lead to forfeiture of EPS by the EPFO).
Hope I am cleared to your points/queries.
From India, Delhi
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Though Mr Abbas has cleared most points (As he usually clarifies in all posts related to PF and Pension). However, for your further query and to make it more clear, pls note my points:-
1) The employee can withdraw his/her EPS contribution only after completing 06 months. Prior to that EPS contribution is being forfeited by the EPFO.
1a) After completion of 06 months the amount deposited towards EPS can be withdrawn fully. But EPFO don’t pay any interest on that contribution. Interest is being paid only on EPF Contributions. The calculation of the factor 1.02 is not clear to me as well. Why this is done on 6500/- is also need clarification. Lets wait for Mr Abbas valued suggestion/s.
2) 9.5 year service is eligible for pension and will be counted at 10 years while doing the Pension Calculation.
3) Same as suggested by Mr Abbas.
4) If employee worked for less than 6 months and opt for withdrawal of PF-EPS than the EPS amount will be forfeited by the EPFO (As I already cleared in my 1 Point). However, if the employee transfer his/her EPF-EPS in new organization and the total service cross 6 months. Than the employee can withdraw full EPS as well (subject to service less than 9.5 years).
5) There is no min service period limit for EPF withdrawal, subject to 06 months service. (less than 6 months service will lead to forfeiture of EPS by the EPFO).
Hope I am cleared to your points/queries.
From India, Delhi
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Respected Abbas ji Please clarify the concept of 1.02 mentioned above, we are all awaiting your valuable suggestions. Regards Anuradha
From India, Mumbai
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From India, Mumbai
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Calcu. pf Emp.eps.epf sample sheet for HR site..xls
EPF,EPS,EDLI.pp t