The pension contribution by an account holder of the Employees’ Provident Fund Organisation (EPFO) is a diversion from the employer’s share of Provident Fund (PF). There is no contribution towards pension from the employee. Here are lesser known facts about the pension scheme being offered by the retirement fund body.
EPFO Pension Scheme: 5 facts to know
1) Since the contribution towards pension is from the employer’s share of contribution, the question if an EPF member can refuse to contribute to the pension component, does not arise.
2) An EPF member cannot become a member of just the pension scheme without becoming a member of Provident Fund scheme. Any new employee joining an establishment with minimum wage of Rs 15000 per month can only become a member of the PF after submitting option as per the provisions under Para 26(6) of the PF scheme. He cannot be the member of pension fund.
3) An employee who joins an organization at the age of 58 is not eligible to become a member of pension fund.
4) Formula for calculation pension amount is – Pension = (Pensionable salary) (average of last 60 months) X Pensionable Service /70.
5) Individual member cannot seek an exemption from the pension scheme but an establishment can seek exemption
6) A member is eligible for pension on superannuation at the age of 58 years. If the employee leaves the job between 50 and 57 years can avail early (reduced) pension. retis can avail
7) In case of death of a member, the family pension and children pension is payable even after receiving 1 month contribution.
8) On death of the member, the pension will go to the spouse widow/ widower.
9) Children are also eligible for receiving pension till the attainment of 25 years.
10: The pensioner can get pension anywhere in the country.
EPFO is one of the World’s largest Social Security Organisations in terms of clientele and the volume of financial transactions undertaken according to claims made by the website. At present it maintains 24.77 crore accounts (Annual Report 2019-20) pertaining to its members.
