Provident Fund contribution is 12% only says EPFO

CBT rejects proposal on EPF contribution. Yes, Central Board of Trustees or CBT of EPFO. It rejected plan to decrease contribution to PF. Moreover this decision came after a meeting. However before there was plan for change in percentage of PF contribution. You can keep reading. Because you know what is final decision.

Current vs proposed plan on provident fund contribution

There was plan to decrease EPFO contribution. Moreover according to plan. PF contribution will be 10%. But CBT rejected this plan. Therefore contribution to provident fund is 12% only. So employers and employees will contribute 12%. Additionally it is best if you know your EPF balance check steps.

Moreover this contribution is to EPF, EPS and EDLI. While here EPF full form is Employees Provident Fund. On other hand, EPS full form is Employee Pension Scheme. And finally EDLI full form is Employee Deposit Linked Insurance Scheme.

Labour Secretary view

Labour Secretary, M. Sathiyavathy said some things. He said that employees and employers were not okay. Especially for 10% contribution to PF. In addition even government representatives were not happy with this plan. Therefore final decision will happen. But it will take every ones opinion.

Present law of EPF contributions

According to current law. Every one must follow rules. Therefore it is compulsory for companies to follow rules. It is when there are 20 or more than 20 employees. And if they earn Rs. 15, 000 minimum. Then employer must give EPF benefits to all employees.

Additionally employee contributes 12% of basic pay to EPF. On other hand 8.33% is contribution of employer. While it is for EPS or Employees Pension Scheme. Finally it is 3.67% contribution of employer to EPF.

Plus employers pay 0.5% for EDLI. They pay 0.65% as EPF administrative charges also. Finally 0.01% is EDLI handling fee. Further employer pays EDLI handling fee also.

Therefore presently there will be no reduction in EPF contribution. So you pay according to old plan. And it is 12% contribution towards provident fund. Know EPFO to provide 8.65% interest on the EPF for 2016-17 FY and Aadhaar card seeding application launched.

EPFO equity exposure increase

Apart from above proposal on PF contribution. There was another proposal of EPFO equity exposure. In addition authorities approved this plan. Thus there will be increase in EPFO equity exposure in share market. And this will give new options to invest. Because for long time.

EPFO invested only in government securities. Or they invested in corporate bonds. However after 2015 there was change. As Employees Provident Fund Organisation aka EPFO. They started investments in ETF.

Moreover here ETF full form is exchange traded funds. Thus it will helps in good returns. In addition EPFO can now invest 15%. But this is of incremental deposits. While it comes up to be Rs. 1.4 lakh crore per annum. So you know about EPF investment in stock market now.

Return on investment

EPFO works hard to get good returns. And that is why it is trying different things. However it also has options for EPFO subscribers. Because it believes to give best as retirement fund body. Now it is to see what will be future of these EPF investments. You can also check Steps to calculate EPF balance and interest with method to know Employees Provident Fund balance.

Leave a Reply

Your email address will not be published.