Employees Provident Fund Organization
Preparations are underway to simplify the process of withdrawing PF under EPFO 3.0. Soon employees will be able to withdraw money from their EPF account through ATM card. This facility sounds quite convenient, but many questions related to it are also coming up. Especially people who are nearing retirement are worried whether withdrawing PF will have any impact on their pension. Will EPS i.e. Pension Scheme be affected by withdrawing money from EPF? It is important to understand this entire matter in simple language, so that employees can take the right decision.
Under EPFO 3.0, the government is preparing to bring a new facility, in which employees will be able to withdraw money from their EPF account with the help of ATM card. Earlier one had to go through a long process to withdraw PF, but now this task will become easier. However, with the advent of this facility, questions are arising in the minds of many employees. The biggest question is that if a person withdraws more money from his EPF account, will his pension be affected?
Effect of PF on pension?
The direct answer to this is no. EPF and EPS are two different schemes. Contributions of both the employee and the company are deposited in EPF, whereas EPS is for pension. The money withdrawn from ATM will be withdrawn only from EPF account and not from EPS. According to the rules, an employee can withdraw only a maximum of 75% of his EPF balance. That means withdrawal of full amount is not allowed. This limit has been kept so that some savings remain for retirement.
The most important thing is that pension is available under EPS and it depends on your years of service. If you have completed at least 10 years of service, you are entitled to receive pension. According to experts, withdrawing money from EPF has no effect on your pension. Your service record or pension eligibility does not change. That means, even if you withdraw money from PF at the age of 50, your pension remains safe. If an employee leaves the job, he has to follow certain conditions to withdraw the pension money. Generally one has to wait for 36 months or withdrawal is possible only after completing 55 years of age.
Many people also feel that if they withdraw the entire EPF money, their pension will be lost. But it is not so, because EPF and EPS are completely different. Overall, it will be easy to withdraw PF from EPFO 3.0, but it will not affect your pension. The basis of pension is the duration of your job, not how much money you have withdrawn.
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