Employees Provident Fund
EPFO: For employed people, the rules of Employees’ Provident Fund Organization (EPFO) are the biggest key to their financial future. If you also work in a company and have left your job before 10 years or are planning to leave, then there is a very important update for you. The Ministry of Labor and Employment has now implemented the new ‘Employees’ Pension Scheme, 2026′ (EPS 2026) in place of the old pension scheme (1995). In this new rule effective from June 29, 2026, a major change has been made regarding pension withdrawal. Now employees will have to wait to withdraw their pension money in lump sum after leaving the job. Let us understand what this rule is and what effect it will have on your money.
It is necessary to complete 10 years of service for pension
It is an old and firm rule of EPFO that to avail the benefit of monthly pension after retirement, the employee should have at least 10 years of service. Those who leave the job before the completion of the 10 years period are not entitled to receive pension every month. There has been no change in this basic rule even in the new EPS 2026 plan.
However, such employees should not be afraid of losing their money. The government gives them two great options. First, they can withdraw their money in lump sum under ‘Withdrawal Benefit’. The second option is to take ‘Scheme Certificate’. If you start working again in any EPFO covered company in future, then with the help of this certificate, the time of your old job will be added to the new job. This makes it easier to complete 10 years of service.
Now there is a rule of 36 months to withdraw money
The New Pension Scheme 2026 has added a ‘waiting period’ for lump sum withdrawal. If an employee leaves the job before his retirement age, he will not be able to withdraw his pension money immediately. According to the new rule, the employee will be able to claim withdrawal only after 36 months (3 years) have passed from the date on which the last pension contribution was deposited in his account.
That means, you will have to wait a long time to get your lump sum money. However, an exemption has also been given in this. If your superannuation age is completed during the wait of these 36 months, then you will not have to wait for the completion of 3 years and you will be able to withdraw your money immediately.
This is how the amount of withdrawal benefit is decided
If you withdraw money after waiting for 36 months, how much money will you get? For its calculation, a direct formula in ‘Table IV’ has been given in the new scheme. To decide the withdrawal amount, your ‘Pensionable Salary’ is multiplied by the ‘Table IV Factor’. This factor depends on how many months you have worked.
Let us understand this with an easy example. Suppose your pensionable salary is Rs 15,000 and you leave the job after working for just 24 months (2 years). In such a situation, according to the table, your factor will be 1.99. When we multiply Rs 15,000 by 1.99, you will get a withdrawal benefit of Rs 29,850.
Whereas, if you have worked for 60 months (5 years) and your salary is the same Rs 15,000, then the factor will increase to 5.02. In this situation you will get a lump sum payment of Rs 75,300. It is clear that the more months your service is, the higher will be your factor and the lump sum amount received.
