EPFO Pension Rules: Did you know that delaying your pension can increase your payout? The Employees’ Provident Fund Organisation (EPFO) allows senior citizens to boost their EPS pension by up to 8% if they delay receiving it until the age of 60. Here’s how you can benefit from this rule, along with detailed examples.

Key EPFO Pension Rules

1. Standard Pension Age: Typically, EPFO members start receiving their pension after retiring at 58 years. However, the rules also allow contributors to delay or take early pensions under specific conditions.

2. Eligibility for Pension: To qualify for an EPS pension, an EPFO member must contribute to the pension fund for at least 10 years.

3. How to Maximize Your Pension: To get the maximum pension, you should wait until the age of 60 to withdraw it, instead of at 58. The longer you hold off, the higher your pension will be. EPFO offers an additional 4% pension for every year after 58, and by waiting until 60, this increase goes up to 8%.

Example of Pension at Different Ages

• Pension at 59 Years: If an employee opts to receive their pension at 59 years, they will receive an additional 4% on top of their basic pension amount.

• Pension at 60 Years: For employees waiting until the age of 60, the increase is even more substantial—8% higher than what they would receive at 58.

To calculate the pension, EPFO considers pensionable service and the salary earned during the years beyond 58. This boosts your overall pension amount.

Early Pension Option (Between 50-58 Years)

You also have the option of taking an early pension between 50-58 years, but this will reduce your pension by 4% per year. For instance:

• If you decide to withdraw your pension at 56 years, you will receive 92% of your pension (100% - 2×4). That means an 8% reduction in your overall pension.

To opt for early pension, you need to submit a composite claim form and choose the early pension option, along with Form 10D.

What Happens If You Withdraw Before Age 50?

If you have completed 10 years of service but are under 50 years old, you won’t be eligible to withdraw your pension. Instead, after leaving the job, you will only be able to withdraw the EPF balance. Your pension will start when you turn 58.

Options If Your Service Period Is Less Than 10 Years

If your total service period is less than 10 years, you have two options:

1. Withdraw Pension: You can choose to withdraw the accumulated pension amount along with the Provident Fund (PF).

2. Pension Scheme Certificate: If you expect to rejoin the workforce, you can obtain a Pension Scheme Certificate. This certificate allows you to link your previous pension contributions to your new job. Once you complete 10 years of total service, you will become eligible for a pension at 58.

By delaying your pension until 60 years of age, you can significantly increase your monthly payouts, offering greater financial security during retirement. Ensure you plan wisely based on your age and employment status to maximize your pension benefits.