Don't be happy with EPFO's higher pension scheme, these disadvantages are more dangerous than benefits - Newztezz Online

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Sunday, February 26, 2023

Don't be happy with EPFO's higher pension scheme, these disadvantages are more dangerous than benefits

Ever since the EPFO ​​has issued a new guideline regarding higher pension, since then many types of questions are being raised among the employees. According to experts, PF account holders who choose higher pension may have to bear 5 big losses. So let us tell you what could be the disadvantages.

EPFO i.e. Employees' Provident Fund Organization has given its account holders a chance to get higher pension after the order of the Supreme Court. But, before taking higher pension, it is very important to assess its profit and loss. While on one hand there are many advantages of this scheme, on the other hand there are many disadvantages of this scheme as well. EPFO has said that soon an online link will also be released for choosing higher pension. Through this, employees can select the option of higher pension.

According to the order of the Supreme Court, the employees who have opened EPF account before September 1, 2014, will be given the option of higher contribution for higher pension. Meanwhile, ever since the EPFO ​​has issued a new guideline regarding higher pension, many types of questions are being raised among the employees. According to experts, PF account holders who choose higher pension may have to bear 5 big losses. So let us tell you what could be the disadvantages.

Money will be transferred to pension

The biggest and first disadvantage of choosing the new option will be that the money deposited in your EPF account will be transferred to the Pension Fund. This will also end the compound benefit available on your PF account. Actually, under the rules of higher pension, a large amount of contribution from the employer has to be put in the pension scheme. This means that a large part of the amount deposited in the PF account till now will be withdrawn and transferred to EPS.

Will not be able to withdraw money in lump sum

You will not be able to withdraw lump sum money from the Employees Pension Scheme (EPS). If you want, you can try your hand at other government pension schemes like National Pension System (NPS). In this, you get the returns running on the market and you will be able to withdraw the money in lump sum. Apart from this, the investment made in it gives you a rebate of Rs 1.5 lakh under 80C and a further tax rebate of Rs 50,000.

Pf account will not get full money

Under the current rules of PF, your nominee gets the entire money deposited in this account in case of any untoward incident. But, in the case of EPS, in case of your absence, the wife will get only 50% pension. This means if you get Rs 20,000 as pension, then your wife will get 50% ie Rs 10,000 only, while the children will get 25% ie Rs 5,000 pension.

Can't retire early

Those who select higher pension in EPS will not be able to take the option of early retirement. The benefit of EPS scheme is available only when the employee has retired after working till the age of 58 years or has completed 10 years of service.

More loss than less interest

You also get less interest in EPS scheme. Instead, you get more interest on your PF account. At present, 8.10% interest is being received annually on the money deposited in PF.

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