If you’re an EPFO subscriber, understanding how much money you can withdraw before becoming eligible for pension is important. Many employees face confusion about how long they must contribute and when it’s safe to withdraw. Knowing the rules will help you make smart financial decisions before retirement and avoid missing out on lifelong pension benefits.
Eligibility for EPS Pension and Minimum Service
Employees become eligible for pension under the Employees’ Pension Scheme (EPS) only after completing a minimum of 10 years of continuous service. If you leave the job before 10 years of service, you cannot get the monthly pension. Instead, you will only get the withdrawal benefit. After completing 10 years, even if you leave the job and don’t continue further, you will still be entitled to a pension at retirement age, which is 58 years.
Withdrawal Benefit Before 10 Years of Service
If your job ends before completing 10 years in EPFO, you are allowed to withdraw the pension amount as a lump sum. But after 10 years, withdrawal of pension contribution is not permitted. You can only claim the pension monthly at the retirement age. This rule applies to EPS and not to the EPF portion, which you can still withdraw based on your contribution and service.
Calculation of Withdrawal Amount and Formula
The EPS withdrawal amount depends on the number of years you have worked and the last drawn salary. EPFO uses a specific table to calculate how much money you’ll receive as withdrawal benefit. For example, if you worked 6 years and your last drawn pensionable salary is ₹15,000, then your eligible amount will be calculated as per the applicable table factor multiplied by salary.
What You Must Keep in Mind
Always check your total years of contribution before applying for withdrawal. If you’re nearing the 10-year mark, it’s better to continue till you cross the limit. After 10 years, pension benefit is more valuable than lump sum withdrawal. Filing Form 10C is necessary for withdrawal, and Form 10D is used when applying for pension after 58 years.