Now Reading: EPFO: EPF interest stops 3 years after retirement, pension rules
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EPFO: EPF interest stops 3 years after retirement, pension rules
Livemint reports that EPFO stops crediting interest on EPF balances three years after retirement, even if the corpus is not withdrawn. For those retiring at 58, interest stops at 61. The balance…
The Story in Brief
Livemint reports that EPFO stops crediting interest on EPF balances three years after retirement, even if the corpus is not withdrawn. For those retiring at 58, interest stops at 61. The balance remains safe and can be claimed later, but no further growth occurs. Separately, the EPFO's Employees' Pension Scheme 1995 offers monthly pension to members with over 10 years of service. The formula uses average salary of the last 60 months and service years divided by 70. A member who joins at 23 and retires at 58 with the wage ceiling of Rs 15,000 receives about Rs 7,500 per month. Disability pension is available without the 10-year requirement.
The Indian Opinion
The narrative that EPF is a set-and-forget retirement corpus is misleading. Many assume the balance compounds indefinitely, but Livemint clarifies interest stops after three years beyond retirement. Similarly, the EPS pension is often dismissed as too small, yet for a 35-year contributor at the wage ceiling, it works out to Rs 7,500 a month, modest but not negligible. Watch for the EPFO's next interest rate announcement: a cut below 8% would further shrink real returns for retirees.
Sources (2): livemint.com, livemint.com (2)
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
