EPFO Pension: Here Are The Different Types And Their Benefits

EPFO Pension: According to EPFO rules, members become eligible for a pension after contributing for a minimum of 10 years

EPFO pension: For private sector employees who are members of the EPFO, it is crucial to understand these options to make informed decisions about their future financial security.

Source : PTI

EPFO Pension: The Employees' Provident Fund Organisation (EPFO) offers a range of pension options to its members, provided they meet specific criteria. According to EPFO rules, members become eligible for a pension after contributing for a minimum of 10 years. Typically, pension payments commence at the age of 58, but various conditions can alter the timing and amount of the pension.

For private sector employees who are members of the EPFO, it is crucial to understand these options to make informed decisions about their future financial security. Here's a breakdown of the seven types of pensions available under the EPFO scheme.

Early Pension

Members who qualify for an EPFO pension have the option to start receiving it as early as age 50, although this comes with a reduction of 4 per cent per year. For instance, if a member is eligible for a pension of Rs 10,000 at age 58, taking it at 57 would reduce the amount to Rs 9,600, and at 56, it would decrease to Rs 9,200.

Dependent Parent Pension

In cases where a single EPFO member dies, the dependent father is eligible to receive a pension. If the father is no longer alive, the mother will receive the pension for the rest of her life. Claiming this pension requires the submission of Form 10D.

Disability Pension

If an EPFO member becomes temporarily or permanently disabled while in service, they are eligible for a disability pension. The usual 10-year contribution requirement is waived in this case, with eligibility starting after just two years of contributions to the Employees' Pension Scheme (EPS).

Widow or Child Pension

In the unfortunate event of an EPFO member's death, their spouse and up to two children under 25 years of age are entitled to a pension. A third child may receive the pension after the first child’s benefit ends at age 25. The 10-year contribution rule does not apply; even one year of contributions is sufficient to qualify the family for these benefits.

Orphan Pension

Should both the EPFO member and their spouse pass away, an orphan pension is provided to up to two children under the age of 25. This pension continues only until the children reach 25 years of age.

Retirement Pension

The standard retirement pension is available to EPFO members once they reach 58 years of age. The amount depends on the total contributions made to the pension fund. Members who defer their pension beyond 58 years can see an annual increase of 4per cent in their pension amount until they reach 60.

Nominee Pension

If an EPFO member passes away without leaving behind a spouse or children, the nominated beneficiary will receive the pension. If both parents are named as nominees, the pension is divided according to the shares specified. If there is only one nominee, they receive the entire pension amount.