Withdrawing your EPS benefit? Here’s why completing 10 years of qualifying service matters, how job changes affect your pension and what employees should know before withdrawing
Many employees consider withdrawing their PF savings when they move from one company to another. However, those planning for retirement should first understand how any withdrawal could affect their EPS benefits. A decision made to meet an immediate financial need could have implications for future pension benefits, making it important to check the long-term consequences before withdrawing.What happens if you withdraw your EPS benefit midway?EPFO’s awareness messaging indicates that withdrawing the relevant EPS benefit before completing the required 10 years of qualifying service can affect future pension eligibility. Employees should therefore not view EPS only as money they can access today. It is also a long-term retirement benefit that can provide a regular income after they stop working.Changing jobs has become a normal part of working life, with employees often moving between several companies over the course of their careers. During these transitions, it is important to keep EPF and EPS records in order. Employees should check their UAN, PF details and service history whenever they switch jobs, particularly if they plan to qualify for a pension after retirement.Why are 10 years of qualifying service important? For many employees, retirement can seem decades away when they begin their careers, making pension planning easy to overlook. But after 20, 25 or 30 years of work, a regular monthly income can become especially valuable once the salary stops. Completing the required qualifying service can therefore be an important part of protecting future EPS pension benefits.Financial needs can arise at any stage of a career, whether for household expenses, children’s education, loans or medical costs. Employees considering an early EPS withdrawal should first understand how it could affect their future pension eligibility. While accessing money now may help meet an immediate need, the long-term value of a regular pension could be greater for some employees. Checking the applicable EPFO rules and service records before making a decision is therefore important.Completing 10 years of qualifying service under EPS is an important requirement for monthly pension eligibility. Employees should therefore think carefully before making decisions that could affect their service record, particularly when changing jobs or withdrawing PF/EPS benefits. It is also useful to regularly check UAN, EPF account and EPS service details to ensure records are accurate. Employees should refer to the latest official EPFO guidelines to understand the rules applicable to their individual circumstances.
The Employees’ Pension Scheme (EPS) can play an important role in an employee’s financial security after retirement. Pension benefits are linked to eligible service and contributions made during employment. Employees should therefore understand how their EPS benefits work alongside their EPF and avoid making rushed withdrawal decisions without considering the long-term impact on their retirement income.
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