EPS pension account: You can make full withdrawal within 10 years now. Should you do it?

You need to be in continuous service for at least 10 years and also be at least 58 years of age to receive a pension under the Employees' Pension Scheme (EPS).

However, if you lose your job and don't want to continue under EPS, you are allowed to withdraw the full amount from your pension account even if you have not completed 10 years of service.

In case of job loss, the final settlement of the EPS account will be done after 36 months, instead of the two months allowed previously. The new provision will ensure continuity of service and pension eligibility for members who may become employed again in these 36 months.

"The Pension entitlement at the age of 58 years is completely unaffected by the proposed changes. A member can withdraw the accumulation in pension account before completing 10 years of service at any point of time in these 10 years," EPFO says.

Should you withdraw within 10 years?

EPS pension could be a good financial support after retirement for workers currently on low wages. Employees with higher wages may withdraw if they don't want to return to the workforce or have already sorted their post-retirement finances.

In any case, you should make your decision based on the following facts:

If you withdraw from EPS before 10 years, you will not be eligible for the EPS pension."To qualify for a pension at retirement, a member must complete at least 10 years of EPS membership," says EPFO.

According to EPFO, about 75% of pension members withdraw their entire pension amount within four years of service. However, when they end their membership in less than 10 years, they become ineligible for future pension and social security benefits.

When the pension fund is not withdrawn, the member’s family remains eligible for pension benefits for up to three years, even after contributions stop in case of the member’s death. However, this benefit is lost if the amount from the EPS pension is withdrawn.

"In order to encourage members to meet the 10-year eligibility for getting pension and to allow his/her family to be eligible for benefits in case of his/her death, the proposed provision allows the member to withdraw pension accumulation after 36 months instead of 2 months. This will ensure long-term social security in the form of pension for the member and his family," EPFO says.