EPFO Pension Benefits: Most of the people working in private jobs consider the PF which is deducted every month only as a support for old age. There is a misconception among the common employed people that they can avail the benefits of Employee Pension Scheme (EPS-1995) only after crossing the age of 58 years. But let us tell you that this is not the whole truth. In fact, EPS is not just a retirement fund, but it is a very strong social security cover for you and your family. If something untoward happens to an employee during employment, such as untimely death or becoming permanently disabled, then this scheme becomes a big financial support for his entire family. As an employee, you must know how your PF account becomes a shield for your family in difficult times.
According to EPFO rules, if an employee has contributed to EPS continuously for 10 years during his employment, he becomes legally entitled to receive pension every month on completion of 58 years of age. However, keeping in mind any kind of emergency, the government has given a special facility of ‘Early Pension’ i.e. withdrawal of pension even after the age of 50 years.
But you should always keep in mind a technical nuance here. If you withdraw this pension amount before the stipulated age (58 years), then due to premature withdrawal, your total pension amount is deducted by some percentage every year. Therefore, this option should be chosen only when there is great need.
Accidents in life never come without informing anyone. If an employee becomes permanently disabled due to a major accident or serious illness during the course of employment, then the rules of EPS completely change and work in favor of the employee. In such a sad situation, a provision for disability pension has been made by EPFO.
The biggest relief in this rule is that unlike normal retirement, no condition of 10 years of service is applicable. Even if you have been in the job for a short time, you start getting this pension. Its direct objective is to provide immediate financial security to an employee whose earning power has been permanently lost due to physical disability.
The real strength of the EPS 1995 scheme is its ‘Family Pension’ model. This scheme is not limited to the survival of the employee only. Unfortunately, if the employee passes away during or after employment, under the scheme, his eligible next of kin are given the benefit of monthly pension every month.
The scope of this family pension includes pension for the spouse (widow or widower), child pension for the education and upbringing of children as well as financial assistance for orphan children in certain special circumstances. This is why financial experts advise not to mistake it for just a common savings account.
A big misconception among people regarding PF account is that whoever is made the nominee in the account, all the money will go directly to him. Let us tell you that the primary right to receive pension in EPS is only to the eligible members of the family as decided by the strict rules of the scheme. If an unmarried employee makes an outsider or friend a nominee, then mere registration of name does not entitle him to the legal right to pension.
Additionally, even a small spelling mistake in your name, date of birth, identity card information, bank account or service record can put your family’s pension claim on hold for months. It is often seen that while changing jobs, people do not transfer the old PF to the new account properly or fill wrong information in Form-11, which is very costly for your family in future.
