EPFO: Provident Fund (PF) is the biggest means of future security for every employee working in the private sector. This amount deducted from the salary every month is not only a savings but also an expectation of pension to be received after retirement. But in today's era, when people change jobs frequently for career growth, the situation of withdrawing money from PF account also arises. In such a situation, the biggest question that arises is that if an employee withdraws money from his PF account before completing 10 years of service, will he get pension after retirement?

Understand the mathematics of PF and pension

Often people consider PF and pension to be the same, whereas technically they are different. When you work, the money deducted from your salary is divided into two parts, one EPF and the other EPS. The entire amount deducted from the employee's salary is deposited in EPF. At the same time, the contribution made by the company (employer) is divided into two parts. Some part of the company's share goes in EPF and a large part goes in Employee Pension Scheme (EPS). This EPS money becomes the basis of your old age pension.

10 years service rule

The most important condition for getting pension is the length of service i.e. service history. According to EPFO ​​rules, it is mandatory for any employee to contribute to EPS for at least 10 years to become entitled for monthly pension after retirement. This period of 10 years can be completed in a single company or by merging different companies. But the problem arises when an employee leaves the job before the completion of 10 years and decides to withdraw the funds.

If the money is withdrawn, will the right to pension be lost?

This is the point where most employees get confused. The rule is clear that if you withdraw your entire PF and EPS fund before completing 10 years of service, then you lose the eligibility for monthly pension in future. When you withdraw money for less than 10 years of service, you withdraw the amount deposited in EPS in lump sum. This withdrawal means that you have terminated your membership from the pension scheme for that period. Therefore, that time will not be counted in your pension service and you will not be able to claim pension on that basis.

It is important to understand the difference between Form 10C and 10D.

EPFO has prescribed different forms for withdrawal and claim, depending on your period of service.

1. Less than 10 years of service: If you have worked somewhere for 7 years or 9 years and left the job, and have no intention of doing any further job within the scope of PF, then you can withdraw your pension money using 'Form 10C'. You will get this money in lump sum, but after this the path of monthly pension will be closed.
2. More than 10 years of service: If you have worked for 10 or 12 years, then the rules change. In such a situation, you cannot withdraw the EPS money. Instead, you are issued a 'Pension Certificate'. You will have to wait till the age of 58 years. On reaching retirement age, you can claim monthly pension by filling 'Form 10D'.