EPFO Rules: Employees’ Provident Fund Organization (EPFO) is a scheme for salaried people which provides a pension benefit after retirement.
As per EPFO rules, 12 per cent of the basic income of the employee is deposited in the EPFO account, out of which 8.33 per cent is set aside for pension account and 3.67 per cent for Employees’ Provident Fund (EPF). If an employee leaves his job or takes leave in between. So in that case do they lose their pension entitlement? You are being given information about this here.
As per EPFO rules, the length of service of an employee is taken into account even if they take leave in between. In other words, if a person returns to his job after a gap of some years, his previous years of service will be added to his current tenure.
Explain that to take advantage of the pension scheme of EPF, it is necessary for the employee to work for at least 10 years. If an employee changes companies, his Unique Account Number (UAN) remains the same and his total working period is calculated net of any gaps in between.
Understand the terms of pension like this
If a person works for a company for 7 years and takes a break of one year, then works for another 4 years, then their total job span will be considered as 11 years. In this scenario, the employee will be entitled to EPF pension benefits. Also, if a person works for 9.5 years, he is eligible for a grace period of 6 months as per EPFO rules, which is equal to 10 years.
This is how you can take advantage of the pension scheme
EPFO scheme is an important financial instrument for salaried individuals, as it ensures pension benefits after retirement. It is important to note that the requirement of length of service for pension eligibility is an important aspect that every EPFO subscriber should be aware of. So, even if you are an EPFO subscriber and you have left your job, you can still avail the benefits of the pension scheme by ensuring a total job tenure of 10 years or more.
