What Is Employees' Provident Fund?
The Employees' Provident Fund is run by a company with the same name with the Government of India. It's a social security organization and gives pension benefits to the large variety of organized workforce in the nation. Let us begin to see the important things about it.
On this scheme, 12 % in the employee's wages are deducted by the organization and an equal amount is contributed by the employer also. It is done in establishments which may have got a staff strength of 20 or higher. In this instance, all of these organizations must belong to the jurisdiction from the scheme.
The actual interest rate is 9.5 percent around the deposits manufactured by the worker. The worker can get a pension on his retirement or there exists provision for the payment of the fixed figure to his family members on his untimely death.
Easy distribution of pension is one of the important things about built. Under built, an employee has to make an account with the registered banks for payment of pension. After the retirement of the employee, pension is disbursed with the organization for the employee concerned. All banks with tie ups usually offer a zero balance account to the pension holders. The pensioners usually obtain pension before the tenth day of every month.
The issue behind the scheme is its reach. It is difficult to get all organizations having an employee strength of 20 or above. The businesses must pay to join towards the organization which subscription rate also prevents the organizations to sign up the scheme. Even so the government is intending to really make the scheme a more attractive and simple. in general the scheme is a good tool for social security.
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