Securing a pension after retirement is a significant concern for private employees. Understanding the concept of a family pension, a crucial provision by the Employees’ Provident Fund for financial security, is paramount.
Let’s delve into this pension’s eligibility, qualifications, and benefits. In today’s world, financial security is a top priority for any family. Many employees, driven by the need for a secure future, plan for a pension.
A pension, such as the family pension, is a powerful tool for ensuring financial security after retirement and reducing dependence on others.
The central government has introduced several pension schemes to secure employees’ financial futures. However, a common concern remains: what happens to the family if the employee passes away suddenly? This underscores the need for additional measures to ensure their financial security.
Employees should consider planning for their family’s future with a family pension. But what exactly is a family pension? Who is entitled to it? Let’s explore the qualifications.
Family Pension is designed for employees working in organized sectors. In the event of an employee’s sudden death before retirement, it provides financial assistance to their family.
Employees contribute 12% of their salary to their EPFO account, and the company management also makes monthly contributions. The employee will receive the money deposited as a pension after retirement. If the employee dies before retirement, their family will receive the pension.
According to EPFO rules, employees who have worked there for at least ten years are eligible for a pension. If the employee dies after that, their family will be eligible for the retirement. However, EPFO has established specific rules for family pension eligibility.
Who is eligible for a family pension?
- The family pension’s primary recipient is the deceased employee’s spouse.
- The employee’s wife will receive 50 percent of the pension.
- If there are two children below 25 years of age, they will each receive 25 percent of the pension.
- If the employee’s spouse remarries after the employee’s death, the employee’s children will receive 75% of the pension until age 25.
- Physically disabled employees’ children will receive 75% of the pension for life.