PF withdrawal done, pension forgotten? Why your EPS service record still needs to be transferred and how to do it

Many employees mistakenly assume that their EPS service history transfers automatically after withdrawing their EPF balance. However, EPS operates separately. Here's why it's important to make a transfer and how to do it.

Many employees withdraw their provident fund balance after switching jobs and assume there is nothing else left to transfer, leaving the old account behind. However, their Employees’ Pension Scheme (EPS) service is tracked separately, and failing to carry forward this service history when changing jobs could affect the pension benefits they may be entitled to later.

EPF and EPS are part of the same social security framework, but they serve different purposes. While EPF helps build a retirement corpus through contributions and interest and can also provide financial support during certain emergencies, EPS primarily tracks an employee’s eligible pensionable service.

Generally, a longer eligible service period can result in the employee receiving higher pension benefits after they retire.

Why EPS service record matters after PF withdrawal

When an employee withdraws their EPF balance, their EPS service history does not automatically get transferred. Hence, when you switch jobs, it is important to ensure that your pensionable service from previous employment is properly linked to your current EPF account.

This matters because EPS eligibility is based on your total eligible pensionable service. Employees generally need at least 10 years of eligible service to qualify for a monthly pension. If your service records are not properly carried forward, your employment history could appear incomplete.

The EPS contribution rate is 8.33% of the monthly wages, which is diverted directly from the employer's total 12% contribution to the employee's EPF account. An employee does not have to contribute towards EPS.