I am 56 years old. I lost my job in 2017 and started working again in 2019. I get a consolidated sum as payment now. I have a provident fund (PF) balance of ₹20 lakh and would like to know the following: Will I get pension for the said amount? And when will it start? Also, if I withdraw the entire amount and invest it via a systematic withdrawal plan (SWP), what are the options available considering my age? I am looking for a monthly income of ₹30,000 after my retirement at the age of 60.
We have assumed that you are not an international worker. We have also assumed that with your current employer, you are not contributing to PF.
From a PF mechanism perspective, where an employee became a member of a PF scheme prior to 1 September 2014, the total contribution made towards PF is bifurcated between PF contribution and pension contribution. An employee’s contribution is entirely deposited in PF, while the employer’s contribution is bifurcated between PF contribution and pension contribution.
The amount contributed towards PF can be withdrawn as a lump sum or in part for specified purposes. Accordingly, you can at your will withdraw your PF balance according to your requirement and regulations in this regard.
In relation to pension contribution, if you have contributed to pension for less than 10 years, you can only withdraw the pension balance as a lump sum. However, if you have contributed to pension for 10 years or more, you shall receive a scheme certificate after the completion of 10 years and further you shall receive the monthly pension once you attain 58 years of age.
With respect to the second part of your query, you are requested to connect with a financial adviser.
Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India.
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