Get Extra Benefits From The Employee Provident Fund

All salaried individuals mandatorily contribute to the Employee Provident Fund managed by the Employee Provident Fund Organization. Now the EPFO is granting subscribers added benefits. Let’s tell you all about it.

In case you want a refresher about the Employee Provident Fund

As per the Employee Provident Fund Scheme, 1952, your employer deposits 12% of your monthly basic salary in the Employee Provident Fund, while contributing another 8.33% from its own pockets. The Central Government makes a contribution of 1.16% to this fund.

The money held in this pension fund can be withdrawn by subscribers when they retire at the age of 58 years.

Here’s the good news

The Employee Provident Fund Organization has recently announced that pensioners, who choose to delay the withdrawal of their EPF balance after attaining the age of 58 years, will be rewarded.

What’s the reward?

If you decide to wait up to the age of 58 years to claim your EPF account balance, you could stand to earn up to 8.16% as a bonus benefit. That sizably increases your pension, right?

How long should you wait?

If you wait for 1 year after the age of 58 years, the EPFO will give you a 4% increase in your pension amount. Wait, there’s better news.

If you wait until the age of 60 years (that’s 2 years) before you dig into your pension account balance, you could get 8.16% extra added to your pension amount.

Want to wait longer than 60 years? No, sorry. That is not allowed. You cannot defer the withdrawal after the age of 60 years.

Additional Reading: Finance Ministry Approves 8.8% Interest Rate On EPF Deposits for 2015-2016

Do you have to continue making contributions to the Employee Provident Fund?

Even if a subscriber does not make contributions to the EPF after 58 years of age, he/she will be eligible to avail this benefit.

Still want to continue to make contributions until the age of 60 years? Go ahead. Those who continue to contribute to the pension fund will also be eligible to claim this benefit.

When will this benefit be enforced?

The new benefit under the Employee Pension Scheme came into effect on 25 April, 2016. New subscribers to the pension fund will also be eligible for this benefit provided they have completed at least 10 years of service by the time they attain the age of 58 years.

Though Pension is a good investment there are many more options out there to help you grow your wealth. For example, Mutual Funds offer excellent returns and hold a reputation for beating inflation.

Let’s explore other investment options.

Additional Reading: Now Withdraw From EPF Without Restrictions