EPFO: What is scheme certificate? Eligibility and requirement explained

The Employees’ Provident Fund Organisation (EPFO) administers a number of social security programmes, including retirement savings under the Employees Provident Fund (EPF), pension under the Employees’ Pension Scheme (EPS), and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI).

The latest EPFO data shows around 7.98 crore contributing members across about 7.68 lakh contributing establishments, while the EPS provides pension benefits to around 82 lakh pensioners.

EPFO: What is the pension benefit?

Notably, all provident fund subscribers who have an account for more than 10 years, are provided with pension benefit. The contribution for this comes jointly from the employer — 8.33% of the 12% contribution is directed towards EPS account, and the government, which contributes 1.16% (subject to wage ceiling) towards the fund.

Notably, the Centre, on 16 September, approved raising the wage ceiling eligibility for Employees Provident Fund (EPF) coverage to ₹15,000, according to a statement from Union Information and Broadcasting Minister Ashwini Vaishnaw. This is the first such hike in 12 years after it was set at ₹10,000 in 2014.

With both the employer and government contributions subject to the wage ceiling, the total accumulated corpus toward your final pension payout is set to increase.

As per the rules, 58 years is considered the age of retirement, and members can choose to delay pension payments till 60 years of age, by either:

Pensions are disbursed monthly to eligible members or beneficiaries (through banks / post offices). This includes superannuation pension, early pension, family pension, orphan / widow pension, and disablement pension. Notably, disbursement is ensured even if the employer defaults, as the EPFO guarantees benefits once membership conditions are met.

EPS: What is scheme certificate and Form 10C?

EPF accounts, with over 10 years, are eligible for pension benefit and at the time of retirement, members can withdraw their provident fund amount in full and choose to maintain annuity in the pension scheme by availing a Scheme Certificate. This can be obtained by submitting Form 10C.

• There are few exceptions — When members accept reduced pension or when members withdraw prematurely due to permanent disablement. In both these cases, the member must apply for claim using Form 10D, according to a Clear Tax report.

Thus, scheme certificate is issued to members who withdraw their EPF contribution but wish to retain their membership with EPFO for pension benefits. It also facilitates transfer of pension account when your employer changes (new job) and ensures that previous pensionable service is added to pensionable service rendered with the new employer thereby, increasing the amount of pension benefits.

Further, if the certificate holder dies, their family can claim pension using scheme certificate.

Disclaimer: This story is for educational purposes only. We advise investors to check with certified experts before making any investment decisions.