EPFO update: Option to withdraw pension at 60 likely to be implemented soon

Employees' Provident Fund Organisation (EPFO) is likely to start giving its beneficiaries an option to start withdrawing pension out of their account once they turn the age of 60, compared to the 58-year maturity currently.

As per The Economic Times report, the EPFO is likely to also offer incentives, such as an added bonus to members who agree to draw their pension after they turn 60.

A senior government official told ET that the proposal to increase the superannuation age for drawing pension will be presented to the EPFO's Central Board of Trustees for approval, post which, the proposal will be sent by the labour ministry for Cabinet's approval.

As per EPFO, the pensionable age for members should be raised, as this increases benefits to members for two additional years of service and grows their pension kitty. Additionally, the proposal will also help cutting the pension fund's deficit by Rs 30,000 crore.

This also aligns EPFO to the government pension scheme and the National Pension System, that have superannuation age set at 60 years.

An employer contributes 8.33% of an employee's salary to pension, with a ceiling on pensionable salary at Rs 15,000, according to the Employees' Pension Scheme, 1995.

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