PF is a great contingency or retirement fund for an employee. Registering for PF through a simple process requires an assortment of documents from the business and the employee. Every company has to offer its employees an EPF or Employees Provident Fund which is akin to a retirement fund. EPF comes under the purview of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. EPF registration is mandatory for organizations with total employee strength more than 20.
1. Pension Coverage
Besides the contribution of the employee to EPF, the employer adds an equal amount which is inclusive of Employee Pension Scheme (EPS). Therefore, EPF saves you a robust pension.
2. Cover of Risk
In case of instances like illness, demise or retirement, Provident Fund helps the dependents of the employee by covering the financial risks they face in such situations.
3. Single Account/one EPF Account
The PF account can be transferred while switching jobs. Universal Account Number(UAN) linked to the Aadhar will start to facilitate the linking of the previous accounts. It can be carried forward to the new employer instead of being closed down. This uniformity ensures that the rate of return is compounded over the years.
4. Emergency Fund
Emergencies are bound to happen at any point of time in life. EPF amount can be of great help during mishaps, illnesses, weddings and educational expenses. Employee can make claims online.
5. Employee Deposit Linked Insurance Scheme
Any person who has PF account is eligible for this insurance scheme that requires only 0.5 % of the salary deduction as premium.