look news india
If you have retired from the job or have recently left the job and have not yet withdrawn your Employees Provident Fund (EPF) money, then there is a very important and relieving news for you. As per the rules of Provident Fund Organization (EPFO), even after the end of active service or retirement, interest declared by the government continues to be received on the total amount deposited in your PF account. However, most of the employees have the misconception that interest stops as soon as they leave the job, which is completely wrong. But you also have to keep in mind that this facility of getting interest is not always (for life). Under ‘EPF Scheme, 2026’, a fixed period of interest has been fixed, which depends on the age at which you have left the job or taken retirement. Under this, different rules have been made for employees below 55 years of age and 55 years or older.
For how long will interest continue to be received if one leaves the job before 55 years of age?
According to the new and amended rules of EPFO, if an employee leaves the job for any reason or takes voluntary retirement (VRS) before completing the age of 55 years, then the amount deposited in his EPF account is not unsafe.
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Interest till 58 years: On the amount deposited in the PF account of such employees Till completion of 58 years of age Interest will continue to be added every year.
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Condition: The most basic condition for this is that the employee will not have to withdraw his PF balance from EPFO, but will have to maintain it in the account itself.
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Example: Suppose an employee leaves his job at the age of 52 years and does not transfer or withdraw his PF funds, then he will continue to get the full benefit of the then declared interest rate of EPFO for the next 6 years i.e. till he completes the age of 58 years.
Rule of 36 months on retirement after 55 years or later
If an employee completes his service and officially retires at the age of 55 or after (e.g. at the age of 58 or 60), then the rules for calculating interest completely change.
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36 Month Limit: From the date of retirement of this category of employees For the next 36 months (i.e. exactly 3 years) Interest is given only on the account.
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Account deactivation: After this period of 3 years after retirement, the account is officially declared ‘inoperative’ by EPFO. Once the account goes into inactive category, any further interest on it stops completely.
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Example: If a senior employee retires at the age of 60 and does not withdraw PF due to not needing the money immediately, he will get the benefit of interest till the age of 63. After this the account will become inoperative, hence he/she should fill the form for Final Settlement before or soon after the age of 63 years.
It is very important to understand the difference between EPF and EPS.
Generally, employed employees consider EPF (Employees’ Provident Fund) and EPS (Employees’ Pension Scheme) as the same scheme, due to which they get confused in understanding the rules. Whereas these two are completely different schemes. Even though both are operated by EPFO, their rules and objectives are different.
Under EPS (Pension Scheme) if an employee has contributed Rs. Minimum 10 years of eligible service If a person has completed the pension, then he can choose the option of getting early pension i.e. ‘Early Pension’ after completing the age of 50 years. At the same time, on completing the age of 58 years, he becomes entitled to get the full monthly pension. EPFO also has a special rule that if an employee defers the commencement of his pension till the age of 60 years instead of 58 years, then he gets the bigger benefit of higher and enhanced pension (4% extra per annum) for every year of delay.
Is it necessary to withdraw PF immediately after retirement?
As per EPFO guidelines, it is not at all legally or administratively mandatory to withdraw PF money on the very next day of retirement. Any employee can leave his money safely with EPFO as per his financial condition and need. Unless the account is declared inoperative under the rules laid down in the ‘EPF Scheme, 2026’, it will continue to receive fixed government interest.
If you do not have any major expenditure immediately after retirement, like marriage of children or construction of a house, then leaving the large amount of PF in the account for some time can be a smart financial decision, because the compounding interest on it gives better returns than bank FD or savings account. However, employees should always keep in mind that not a single rupee of interest will be added once the account becomes inactive. Therefore, take the final decision of PF withdrawal keeping in mind your actual retirement age, future financial plans and rules and regulations.