An employee covered by the Employees’ Provident Fund not only gets a lump sum at the time of retirement but also receives a pension from the age of 58. But very few are actually aware of the fact that the EPFO (Employees’ Provident Fund Organisation) is empowered to offer more than half a dozen types of pensions. Let’s see what these are.
Retirement pension
This is the normal pension that an employee begins getting when he/she turns 58, the amount of which depends on the total contributions made to the pension fund. One should remember that if one opts to get the pension at 60, instead of 58, the pension will increase at the rate of 4% every year.
Early pension
One can opt for monthly pension right after the age of 50, provided he/she has completed 10 years of service by that date. However, early pension will result in the amount reducing by 4% for every year it is brought forward.
Widow pension
If an employee who is an EPFO subscriber expires, his/her spouse is entitled to a pension. The pension is also available to 2 children if they are under 25. The stipulation of a minimum of 10 years of service does not hold in this case. Just 1 year of EPF contribution will make one eligible.
Dependent parent pension
If the EPFO subscriber dies and has a dependent father, he will start getting a pension. In the event of the father expiring, the mother of the employee is entitled to get pension for the rest of her life. Incidentally, form 10D has to be filled and submitted by the parent of the deceased EPFO member.
Disability pension
This pension is exceptional since the minimum 10-year service is waived in this case. A subscription to EPF for just 2 years will suffice to get this pension. It is available to any employee if he/she suffers from disability during the service period.
Orphan pension
If both the EPFO subscriber and his/her spouse expires, two children, if they are below 25, will be entitled to an orphan pension.
Nominee pension
The nominee of the subscriber will get a pension if he/she has no spouse and/or no children.
Employees’ Provident Fund is usually referred to for building a significant corpus at the time of a retirement of an employee. But it also pays different types of pension. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
