Employee pension scheme (EPS)
Employees in the organized sector are entitled to a pension when they retire at the age of 58 under the system. However, the scheme’s benefits are only available if the employee has worked in the company for at least 10 years. Both employer and employee each contribute 12% of the employee’s salary to the EPF. For employees who joined before 1 September 2014, 8.33% of the employer contribution goes to EPS, and the remaining 3.67% is paid to EPF. For employees joining from September 1, 2014, EPS is available to employees who receive a monthly salary of up to 15,000 for 30 days.
Employees’ Provident Fund (EPF)
EPF is one of the largest and most important social safeguards in the one offered by EPFO in terms of clientele and financial activities. It now manages 24.77 Cr accounts for its members (Annual Report 2019-20). As mentioned above, the employer’s contribution goes to 3.67% of the EPS benefits for the EPF. For the rest of the staff, the entire 12% contribution goes to the EPF. The current interest rate on EPF deposits is 8.50 percent per annum. EPF members can log in to their accounts online and perform tasks such as making withdrawals and monitoring their balance. It is easier to log in to EPFO’s member page by using the universal account number (UAN). Your business can give you a UAN. If you are unable to do so, you can quickly find the UAN by logging in to the UAN page with your Member ID.
Employees’ Deposit Linked Insurance Scheme (EDLI)
It is an insurance scheme linked to the EPF, and comes as standard. 0.5% of the employer’s contribution goes to EDLI as a premium of the insurance scheme. If there is no other group insurance program, the maximum monthly contribution is Rs. 15,000. During the COVID-19 pandemic, April 28, 2021, both the maximum insurance coverage and the bonus have been increased. The maximum insurance coverage increased to 7 lakh from 6 lakh previously, while the premium insurance coverage remains at 2.5 lakh Rs. The bonus has been increased to Rs.2.5 lakh from Rs 1.50,000. If the insured employee dies in the service, the sum insured is paid to the deceased employee’s registered manager.