An investment plan has been the key essential thing in Indian country. Employees have to register in the retirement scheme namely EPF. The scheme which works under the employee provident fund organization is set to give employee relief after retirement age. The Indian government has embraced the idea and supports full PF accounts.
Employee provident fund is funded by both employer and employees as they give 12% of the salary. These contributions are done after every payment. Companies and organizations with more than 20 workers are required to register them under the EPFO. This doesn’t leave out those who are less; the government encourages all workers to register in order to have income after retirement.
This scheme comprises of other schemes which get some share of the 12% deduction. 3.67% is given from the employee’s side and the rest 8.33% is contributed by the employer. The EPS scheme receives 8.33% and then slashed down to other schemes. This caters for medical and house allowances. The scheme also covers the family members of the employee where they he/she can take loans which are to be refunded after sometime.
Higher voluntary EPF contribution by employee
This contribution is also known as the voluntary provident fund. Here the employee can agreed to give more amount than the said 12% of rom the same salary. The amount is saved differently but earns a particular interest fee. This is not a mandatory payment and one can stop at any moment or join the VPF scheme.
How to make withdraws from the EPF account.
EPF Contribution accounts are designed to work mostly at the retirement age. Employees are to gain the money soon as they attain the age. However, the account has several benefits as loans where one can take for emergency uses. 55 years is the legal retirement age in the Indian government. Employees who have attained the age of 54 and above have the right to get 90% of the interest.
Those who withdraw without getting to the retirement age can do so in a period of 60 days or more. The EPF account is still useful even after the 55 age as the employee can benefit from what it offers.
Interest rates are calculated according to the years and the rate given by the government and EPFO.
Universal account number
This unique number is mandatory for all Indian citizens. Employees are to link the UAN and Aadhaar card. The card/number stands in for the member ID. This means you don’t need to keep on giving details in different accounts. It can link all the accounts an EPF member holds.
What happens when one leaves one job and joins new organization?
The EPFO has ensure all details and matters are well resolved. Employees can change from their old to new EPF account without leaving behind the amount saved. Using an official website employee needs the old or new employer to activate the UAN number and details and with this they can continue receiving the funds in the new account.