EPS 95 Detail : Employees’ Provident Fund Organization (EPFO) has given its account holders a chance to get higher pension after the order of the Supreme Court. Amidst all the discussions, it is discussed that by taking EPC 95, you will get a strong pension.
This is absolutely correct. It is good to get more pension, but what price will have to be paid for it, that too should be known. We are saying this because whatever pension you will get, it will be from your own money. Government or EPFO or your employer company is not going to give any extra money. Understand it like this – even after opting, the same amount will go to the EPF account as it used to go earlier.
Out of that money, it will be possible to give higher pension only by putting less in your PF, and more in EPS (pension). It is clear from this simple thing that for more pension you will have to compromise with the huge lump sum amount that you can get in PF. So,
The Supreme Court has said that the employees who have opened EPF account before September 1, 2014, will be given the option of higher contribution towards higher pension. Ever since the EPFO has released its guideline regarding higher pension, many doubts and questions are being raised among the employees regarding this.
EPFO has said that soon an online link will also be released for choosing higher pension. Through this, employees can opt for higher pension. However, in the previous news we have answered all those questions which may be in your mind. You can clear all your confusion by visiting this given link – Here , Experts say that PF account holders opting for higher pension may have to bear 5 major disadvantages.
1- The money of PF account will ‘fly away’
The biggest and first disadvantage of choosing the new option will be that the money deposited in your EPF account will be transferred to the Pension Fund. This will also end the benefit of compound interest on your PF account. Actually, under the rules of higher pension, a large amount of contribution made by the employer has to be put in the pension scheme. This means that a large part of the amount deposited till now in the PF account will be withdrawn and put in EPS.
2- No facility of lumpsum withdrawal
You do not get the option of lumpsum withdrawal in the Employees Pension Scheme (EPS). It gives your total accumulated amount in the form of pension. If you want, you can try your hand at other government pension schemes like National Pension System (NPS). Here you get market linked returns and you can also withdraw a lump sum amount. Apart from this, the investment made here gives you a rebate of Rs 1.5 lakh under 80C and a further tax rebate of Rs 50,000.
3- Full money of PF account will not be received
Under the current rules of PF, in case of any untoward incident, your nominee (wife-children) gets the entire money deposited in this account. But, in the case of EPS, in your absence, the wife will get only 50 per cent pension. This means that if you get Rs 20,000 as pension, then your wife will get 50 per cent ie Rs 10,000 only, while the children will get 25 per cent ie Rs 5,000 pension.
4- Cannot retire early
The biggest loss for those opting for higher pension in EPS will be that they will not get the option of early retirement. The benefit of EPS scheme is available only when the employee has retired after working till the age of 58 years or has completed 10 years of service.
5- More loss than less interest
In EPS scheme, you also get less interest. This means that the money you have deposited in this item, you will get less return on it. Instead, you get more interest on your PF account. At present, 8.10 percent annual interest is being received on the money deposited in PF.