EPFO: What happens to your EPS if you leave your job before 10 years? Find out the EPFO ​​rule..

Private sector employees are covered under the EPFO ​​schemes known as EPF and EPS. EPF stands for Employees' Provident Fund, while EPS stands for Employees' Pension Scheme. Money accumulated in the EPF is paid to employees upon retirement. Contributions to the EPS entitle employees to a monthly pension after retirement. A key condition is that an employee becomes eligible for the pension only after completing at least 10 years of service. The question arises: what happens if the 10-year service requirement is not met?

**Conditions for Pension under EPS 2026**

The Employees' Pension Scheme (EPS) 2026 has replaced the EPS 1995. The new scheme maintains the requirement that an employee is eligible for a pension only after completing at least 10 years of service—a condition that also existed under EPS 1995. Employees who fulfill this condition will be entitled to a pension after retirement.

**Options Upon Leaving a Job Before 10 Years**

If an employee has not completed 10 years of service, there are two options regarding the money accumulated in their EPS account: they can either withdraw the funds or obtain a Scheme Certificate. An employee can exercise either of these options provided they are below the retirement age.

**Withdrawal Permitted 36 Months After Leaving the Job**

The withdrawal rules have been modified under EPS 2026. According to the new rules, if an employee leaves their job before reaching retirement age, they become eligible to withdraw their funds 36 months after the date of the last contribution made to the EPS account. Alternatively, they can withdraw the money upon reaching retirement age. Whichever of these two events occurs first will apply. Option of a Scheme Certificate for the Employee

The rules state, "If an employee leaves their job before reaching retirement age without completing 10 years of service, they can avail of the withdrawal benefit only after 36 months have passed since the date of the last contribution to their EPS account." The second option is the 'Scheme Certificate.' Under this option, the service period from the previous job is carried forward when the employee joins a new job.

Formula for Calculating the Withdrawal Amount

According to Schedule II of the EPS 1995 scheme, the amount payable to the employee upon withdrawal is calculated based on the number of months of eligible service. At the time of exit, the 'pensionable salary' is multiplied by a specific factor prescribed in the schedule corresponding to the duration of service. This can be easily understood with an example.

Understanding through an Example

Suppose an individual resigns after working for 36 months. If their pensionable salary is ₹15,000, then to calculate the withdrawal benefit, this pensionable salary must be multiplied by the factor specified in the schedule.

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