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| EPF Pension Withdrawal Calculation – Table D |
In this post, I will explain to you the epf pension withdrawal calculation. Every employee needs to know why in some cases after filling the form 10c for pension withdrawal, they are not able to withdraw their full pf pension amount. Also, the actual reason for the pension deduction is hidden under this calculation made by the EPFO.
We will see the actual cause of the pension deduction and other factors included in it. Let’s get started.
Employer Contribution towards Employee’s PF and Pension
- The employer contributes 12%, out of which 8.33% goes to the employee’s pension balance and 3.67% to the employee’s PF balance.
- The employer contribution is made on monthly basis and can be viewed on the employee’s passbook. So the employer doesn’t deduct your pension according to him/her during the withdrawal.
EPO Rules for Pension Deduction with Service counted
- The Employee Provident Fund Organization (EPFO) has made certain rules regarding the deduction of employees’ pension withdrawal amount.
- The minimum eligibility to withdraw pf pension amount is equal to or more than 6 months of service and below 10 years of total service.
- If the total service of an employee is less than 6 months, then EPFO considers it as a 0 service count for withdrawing pf pension. So less than 6 months of pension amount is not withdrawable.
- Similarly, If the total service of an employee is more than 6 months, then EPFO considers it as a 1-year service count for withdrawing pf pension. So more than 6 months of pension amount is withdrawable.
|
Employees Name |
Employee ABC |
Employee XYZ |
|
Total Service |
1 year 5 months |
2 years 7 months |
|
Employer Pension Contribution |
1 year 5 months |
2 years 7 months |
|
Pension Amount in Passbook up to |
1 year 5 months |
2 years 7 months |
|
Pension Withdrawal |
Eligible |
Eligible |
|
EPFO Rule of service count for withdrawing the pension amount   ( >=6 months is 1 year ) & (<6 months is 0 years) |
The only 1-year pension amount is withdrawable (because 5 months < 6 months of minimum service) |
The 3-year pension amount is withdrawable (because 7 months > 6 months of minimum service) |
|
Withdrawal Pension |
1 year + 0 (5 months) = 1 year |
2 year + 1 year  (7 months) = 3 year |
EPF Pension Withdrawal Calculation –Â Table D
After referring to the previous example regarding the service counted by the EPFO in addition to pension withdrawal. We will now see the pension calculation as per the service counted by the EPFO for withdrawing the pension balance.
Table D is the EPFO pension calculation table. With the help of this table, we will get an idea of how much pension we will receive at the time of the pension withdrawal.
|
Table D: EPS withdrawable on exiting job |
|
|
Years of service |
Proportion of wages |
|
1 |
1.02 |
|
2 |
1.99 |
|
3 |
2.98 |
|
4 |
3.99 |
|
5 |
5.02 |
|
6 |
6.07 |
|
7 |
7.13 |
|
8 |
8.22 |
|
9 |
9.33 |
Let me show you an example to understand better pension calculation by referring to Table D.
|
Employee ABC |
Employee XYZ |
|
Basic Pay + DA = Rs. 13,000 |
Basic Pay + DA = Rs. 13,000 |
|
Actual Service – 2 years 5 months |
Actual Service – 2 years 7 months |
|
According to EPFO Rule concerning service |
|
|
Service Count – 2 year |
Service Count – 3 year |
|
Pension Calculation Formula |
|
|
Pension = [ (Basic + DA) x (% of proportion of wages) ] |
|
|
Pension = 13,000 x 1.99 = Rs. 25,870 |
Pension = 13,000 x 2.98 = Rs. 38,740 |
Note: Refer to Table D (i.e. for % of the proportion of wages).
So, from the above example, we got Employee ABC’s withdrawable pension amount of 2 years with some deduction and Employee XYZ’s withdrawal pension amount of 3 years without deduction.
Conclusion
If you’re planning to withdraw your full pension balance by filling the form 10c. Make sure you check your total service period. If your service period falls below 6 months. That service period will be counted as 0 by the EPFO and you will not be able to withdraw that pension balance
If your service period is equal to 6 months or more than that, then your service is counted as 1 year by the EPFO. In this case, you can withdraw a pension balance of 1 year. So choose wisely and make a wise decision before claiming for pension amount.