EPFO Regulations: The Employees’ Provident Fund Organization (EPFO) is a pension plan for salaried workers that provides benefits after a certain number of years of service. Thus, according to EPFO regulations, 12% of an employee’s basic income is deposited in EPFO, with 8.33% going to the pension account and 3.67% going to the Employees’ Provident Fund (EPF). But what if an employee quits or takes a break in the middle of their shift? Do they lose their right to a pension?
EPFO rules state that an employee’s job tenure is considered, even if they take a break in the middle. To put it another way, if a person returns to their job after a few years away, their previous years of service will be added to their current tenure. To be eligible for the EPF pension scheme, an employee must have worked for at least ten years. When an employee changes jobs, their Unique Account Number (UAN) remains the same, and the total length of their job tenure is calculated by removing any gaps in between.
As an example, if a person works for a company for 7 years and then takes a one-year break before returning to work for another 4 years, their total job tenure will be considered 11 years. In this case, the employee is eligible for EPF pension benefits. Furthermore, if a person has worked for 9.5 years, they are eligible for a 6-month grace period, which is equivalent to 10 years under EPFO rules.
The EPFO scheme is a vital financial tool for salaried individuals because it guarantees pension benefits after retirement. It should be noted that the job tenure requirement for pension eligibility is an important consideration that every EPFO subscriber should be aware of. So, if you are an EPFO subscriber who has taken a break from your job, you can still benefit from the pension scheme if you have worked for at least 10 years.
