EPFO
- March 13, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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EPFO
TOPIC: Economy
Context- The return on workers’ retirement savings parked with the Employees’ EPFO has been slashed to 8.1% for 2021-22 from the 8.5% rate credited to members’ accounts in the past two years.
Concept-
- The cut in the EPF rate, at a time when inflation is resurging, attracted criticism from the central trade union representatives on the Board who called for the 8.5% return to be retained.
- Employee representatives had also opposed the last rate cut on EPF savings from 8.65% in 2018-19 to 8.5% in 2019-20.
About EPFO:
- Employees’ Provident Fund Organisation is a government organization that manages provident fund and pension accounts of member employees and implements the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.
- It is administered by the Ministry of Labour & Employment, Government of India.
- It is one of the World’s largest Social Security Organisations in terms of clientele and the volume of financial transactions undertaken.
- It operates three schemes –
- EPF Scheme 1952,
- Pension Scheme 1995 (EPS) and
- Insurance Scheme 1976 (EDLI).
Employees Pension Scheme (EPS):
- It is a social security scheme that was launched in 1995.
- The scheme, provided by EPFO, makes provisions for pensions for the employees in the organized sector after the retirement at the age of 58 years.
- Employees who are members of EPF automatically become members of EPS.
- Both employer and employee contribute 12% of employee’s monthly salary (basic wages plus dearness allowance) to the Employees’ Provident Fund (EPF) scheme.
- EPF scheme is mandatory for employees who draw a basic wage of Rs. 15,000 per month.
***For further Reading Refer to DPN 21 November 2021.