What Is Employee Provident Fund:
Employees’ Provident Fund (EPF) is an investment scheme designed for salaried people in India. A statutory body operating under Ministry of Labour and Employment, and which is called Employees’ Provident Fund Organization is mandated to administer social security schemes as prescribed in the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. The social security schemes include Pension, Insurance, and Provident Fund offered to industrial employees.
Employees who have opened a Provident Fund account are able to benefit from the scheme. All establishments employing 20 or more workers should allow their employees to have the Provident Fund accounts.
Employees’ Provident Fund is among the main platforms that allow employees in the Public and private sectors to save their earnings. The scheme came into existence after setting forth the Employees’ Provident Funds Ordinance on November 15, 1951, following which it was replaced by Employees’ Provident Funds Act, 1952. Today, this act is referred to as Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 and applies to the entire of India except in Kashmir and Jammu.
The Bill on Employees’ Provident Funds was tabled in Parliament in 1952 as Bill number 15 of that year. Its aim was to provide a body of provident fund serving employees in factories and other workplaces. Since it was enacted, the Act has undergone 15 amendments.
Through the Employees’ Provident Fund Organization, employers are able to get online services thereby enjoying transparency, comfort, and efficiency. In recent times, a new online service was established to help members transfer their provident fund accounts online from one organization or employer to another.
For instance, if an employee switches his or her job, he or she can easily transfer their provident fund account online in case both organizations are governed under the EPF & MP Act 1952. The PF account transfer is also available for employers. Before applying for transfer of provident fund account, both employers and employees should keenly read the guidelines.
A Provident Fund helps create financial security and stability among employees. Employees can secure their future finances by opening a PF account. An employee should start the contributions to this fund when they join a company or are employed. The contributions allow the employees to contribute a portion of their salary in every month so that they save an amount, which they can use in case they are temporality out of work, they retire, or when they are no longer fit to work.
Both the employer and employee contribute 12 percent of the employee wage, which goes to the fund under the account of the employee. The employer also makes contributions towards the administration of benefits provided under the EPF & MP Act.
An employee, when joining the savings scheme needs to execute a nomination. The employees should fill the EPF Member Registration Form, the Returns Form, and the Claims Form. The contributions, which employees make towards their PF accounts, are invested as defined by the Pattern of Investment. The balances in their accounts earn them interest depending on the rate that is declared annually by the Government. The tax-free interest, as well as maturity award, ensure that an employee has a good growth of their money.Sponsored Links