New Delhi, Business Desk. The Employees Provident Fund (EPF) proves to be very helpful in meeting the post-retirement requirements of a salaried employee. In EPF account, 12 percent of the employee’s basic salary is deposited by the employee and 12 percent by the employer. Employee Provident Fund Organization (EPFO) provides other important facilities besides creating retirement funds in EPF account. These are insurance, loans and pensions. Let us know how PF account holders benefit from these facilities.
Insurance facility is available
Many PF account holders are not aware that they are also getting insurance facility with PF account and they fail to claim it. SEBI Registered Investment Advisor Jitendra Solanki said that PF account holders get insurance under the Employment Deposit Linked Insurance Scheme (EDLI). The employee is not required to apply separately or pay premium for this insurance. 0.5 per cent of the employer’s contribution to the EPF account automatically goes to the EDLI.
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In this insurance scheme, the employee gets insurance up to six lakh rupees. A lump sum payment is made to the family member, legal heir or nominee of the EPF account holder on death during the service period. This payment amount is 30 times of the salary received by the employee in the last 12 months or a maximum of six lakh rupees. To get the insurance amount, the nominee has to fill a form and submit it to the EPFO office.
Can take loan
EPF account holders can also take a loan on their EPF account after completing the service period of five years. An employee can take a loan on a PF account to buy a house, buy a plot, get the house repaired, get married or pay a home loan, etc. For this, the employee has to apply for PF Advance through online facility available by EPFO. However, Solanki believes that the EPF account is meant to meet post-retirement needs, so it should not be molested unless there is a lot of need.
There is also the facility of pension
Pension facility is also available in EPF account. This is known as Employee Pension Scheme (EPS). Under this scheme, there is a provision of pension after the retirement age of the employee is 58 years. To avail this facility, an employee must have completed at least 10 years in service. The amount of pension received by the employee depends on the pensionable salary and pensionable service of the employee. Of the 12 per cent contribution made by the employer to the PF account, 8.33 per cent or Rs 1250, whichever is less, is deposited in the employee pension scheme.
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