EPF stands for Employee Providence Fund. EPF is a statutory body that is empowered with authority to implement compulsory insurance and pension schemes to specific categories of employees in Delhi region. Its general goal is to promote financial independence and inculcate a saving culture among the Indian working class and their families in a transparent manner. EPF has power to initiate, audits, and prosecute defaulters. On its part, the law tasks the organization with ensuring open access to its services and information by the public.
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Advantages of saving under EPF
As an institution backed by the government, every citizen who registers under the scheme is assured that their savings and interests accrued throughout the time they use these services are under safe custody.
One is also assured that incase of death or accident, their family will be able to cope better with the financial turbulences that accompany such calamities; not only does the scheme cater for widows but also the children of members who were registered under the scheme at the time of that occurrence. More specifically, the benefits of EPF-
- Providence benefits
EPF provides for an easy collection method through a check off system initiated by the employer. Apart from implementing a convenient and cost-free collection method, the scheme also compounds and adds interests to your money. When a member is experiencing financial turmoil, he or she is also allowed to withdraw some percentage of the funds without terminating agreement. Members who resign from their jobs can also choose to take away all their savings or leave it with the scheme for future benefits.
- Pension Benefits
Members who have contributed to the fund for ten years or more of continuous service automatically qualify for pension payments once they attain the appropriate age, that is, unless they withdraw their contract. Members who choose to remain within the scheme even after retirement will get a scheme certificate through which they will claim pension; in case they die, their families can still use the certificate to get monthly compensations from the fund.
- Withdrawal benefit
When quitting their job, a member has the option to withdraw funds if they so wish. The amount is not equal to what you have been contributing during your service time, rather, it has accumulated interests as stated in the contract, additional input from the government, and additional compulsory contributions by your employer.
When they leave funds within, members who have not achieved ten years of service can enjoy other benefits except pension. However, if they die even without completing the period, their widow and children will qualify for family pension.
While EPF is only compulsory for people earning RS. 15, 000 and below as from 2014, it would be of high benefit for those who earn higher salaries to register into the scheme. Even if you are already registered with another scheme, you can still save with EPF and earn double payments in future. Moreover, the scheme gives you an additional opportunity to avoid taxation on income.