Over 1 Crore New Members Enroll In EPFO in FY 24, NPS See Record Addition

EPF, ESI & NPS: Scheme DetailsEmployees’ Provident Fund EPFThe Employees’ Provident Fund (EPF) is a mandatory savings scheme managed by the Employment Provident Fund Organization (EPFO). It is mandatory for every establishment in which 20 or more persons are employed. Those employees with salaries up to Rs. 15000 per month should be mandatorily covered and others can join voluntarily. As much as 12 per cent of their salaries will be routed to EPF, with an equal contribution by employers. Currently, EPF provides 8.25 per cent interest on the contributions. The amount is accumulated to give pension benefits once they have served a minimum period of 10 years and reached 50 years of age.Employee’s State Insurance SchemeEmployee’s State Insurance Scheme (ESI) Scheme is a social security scheme that covers employees in non-seasonal, manufacturing establishments employing 10 or more workers excluding mines, railway sheds etc. The threshold limit for health and medical institutions is 20 or more workers. It gives insurance coverage against sickness, maternity, death or disablement due to an employment injury or occupational hazard. The wage ceiling is Rs. 21,000 per month. The employer contributes 3.25 per cent of the wages payable and the employee contributes 0.75 per cent of the wage towards this insurance.National Pension SchemeThe Pension Fund Regulatory and Development Authority (PFRDA)’s National Pension Scheme (NPS) is a low-cost, tax-efficient retirement account primarily where withdrawals are restricted until the age of 60.  But there is an NPS Tier 2 account, allowing withdrawals when needed.For those working in the government sector, the employee and employees contribute to the employee’s retirement account.  When enrolling, subscribers select a Pension Fund Manager (PFM) and specify investment preferences. They can choose asset classes such as Equity, Corporate Debt, Government Bonds, and Alternative Investment Funds. A defined contribution should be made and the accumulated wealth depends on the income generated from investment in your contributions. The returns of NPS equity investments stand at 17 to 19.24 per cent in 3 years depending on the fund managers.  Over 5 years the NPS shows returns in the range of 16.60 to 18.35 per cent on equity investments.

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