EPS Whithdrwal if worked for 1 year at the age of 59

One of our ex-employees worked with our company for one year from 2016-2017. Recently, he applied for EPF and EPS withdrawal, wherein his EPS withdrawal request got rejected due to non-eligibility. Please confirm if, because of his age factor, he is not eligible. His current age is 60 years. However, the year of service is only 1 year, and for the pension scheme, the minimum service limit is 10 years. Please give clarity on this issue.

The minimum service required for a pension is 10 years, and in the above case, the individual does not meet the criteria. Also, as he was appointed at the age of 59, how did you pay EPS contributions? EPS contributions are supposed to be paid only up to the age of 58 years.

I hope this helps! Let me know if you have any further questions.

Dear Juyal,

UNDER EPS

- Pension contribution not to be paid:
When an employee crosses 58 years of age and is in service (EPS membership ceases on completion of 58 years). When an EPS pensioner is drawing Reduced Pension and re-joins as an employee. In both cases, the Pension Contribution @8.33% is to be added to the Employer Share of PF. (Pension contribution is not to be diverted, and the total employer share goes to the PF).

In case an Employee, who is not an existing EPF/EPS Member, joins on or after 01-09-2014 with wages above Rs 15000/-, in these cases, the pension contribution part will be added to the employee's share, EPF.

- In all other cases, Pension Contribution is payable. A member joining after 50 years of age, if not a Pensioner, does not have the choice of not getting the Pension Contribution on grounds that he will not complete 10 years of eligible service. The social security cover is applicable till he/she is a member.

Please submit a letter to the PF Department stating erroneously that the Employee was covered under EPS even though he was not eligible. Further, request for transferring the amount lying in the Pension Account to the EPF Account. Thereafter, the Member will get the Contribution lying in the EPS Account. PF Department would have rejected the EPS Claim, through a letter citing reasons. Address the issues raised therein.

EPF itself will not accept contributions due to the advancing age. However, it appears that EPF has been accepted by oversight and needs to be returned with interest to the employee without further delay.

The matter will be entertained in the consumer court as this appears to be a deficiency of service on the part of EPF.

Dear Sogemar,

The employer has not followed due procedure in the coverage and remittance of PF contributions. Furthermore, this does not amount to deficient service.

The employee is entitled to claim from EPFO his dues along with withholding interest. The employer can inform EPFO to release the amount so that he can rectify the mess he has created, and the employee can submit the necessary form for withdrawal.

In the event, if the EPFO refused, which is the usual attitude, then it may be considered as a deficiency of service on the part of the EPFO, not the employer.