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Often, when people change jobs or need money, they withdraw the entire amount from their EPF account and are happy that the entire settlement has been made. In reality, this is where they make a big mistake, which they realize at the age of 58. Yes, if you ignore the 'Scheme Certificate' while withdrawing PF funds, you could lose your monthly pension in old age forever. So, let's understand in simple terms what this certificate is and why it is the lifeline of your pension.

Question: What is the difference between PF and Pension?
When PF is deducted from your salary, it is divided into two parts:

EPF (Employee Provident Fund): This contains a major contribution from you and the company, and you can withdraw it upon leaving your job.

EPS (Employee Pension Scheme): 8.33% of the company's contribution goes into the pension fund. This is the money you receive as a monthly pension after retirement.

Impact: People withdraw their PF funds, but don't pay attention to what to do with the EPS (pension) money.

Question: What is a 'Scheme Certificate'?
The Scheme Certificate is a type of 'service passbook'.
It is a document issued by the EPFO.
It states the number of years you have worked and the amount of your pension deposited.
Important: If you leave your job after less than 10 years of service, you have two options: either withdraw your pension (withdrawal benefit) or take the 'Scheme Certificate'.

Question: Why is this certificate a support in old age?
The EPFO's rule is that to receive a pension, you must have 5 years.
Now, suppose you worked for 4 years at Company A and 6 years at Company B. If you didn't obtain a scheme certificate when you left Company A, your last 4 years of service could be considered zero. The scheme certificate establishes the continuity of your pension. This certificate tells the EPFO ​​to add your previous service to your previous service so that your total service reaches 10 years or more, making you eligible for a pension.

Question: What happens if you withdraw the money?
Most people withdraw the entire amount by filing Form 19 (PF Withdrawal) and Form 10C (Pension Withdrawal) as soon as they leave their job.

Disadvantage: Once you withdraw your pension money (Full Withdrawal), your service may be considered over.

Risk: If you continue to withdraw your pension money, you will never complete 10 years of total service and may lose your monthly pension upon retirement.

What is Form 10C?
EPF Form 10C is for employees who have worked for more than 6 months but less than 10 years. After leaving a job, if you wish to withdraw your pension (EPS) or obtain a Scheme Certificate, this form must be filled out. It is specifically for unemployed individuals.

What is the role of Form 10C?
If you are leaving your job and are under 58 years of age, you can apply for a Scheme Certificate by filling out Form 10C. Essentially, this certificate must be kept until you reach 58 or join a new job.

Understand the whole thing in short words.

It's not wise to simply withdraw your PF money. So, if you want to avoid begging in your old age and receive a fixed pension in your bank account every month, then definitely obtain a scheme certificate. Yes, you must have understood that this is not a piece of paper, but a guarantee of your retirement.

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