|
New Delhi, Oct 6: given to workers who withdraw from the scheme before completing ten years of service. “Earlier, we used to give 10-11% returns on premature withdrawals of EPS. It was actually profitable to withdraw from the scheme and rejoin with a new account, especially given the higher mobility seen in the labour market over the last decade,” a senior EPFO official explains. Now those who exit early from the scheme will get only a 6% return on their EPS savings.
The EPS 1995 is entirely funded by the employer’s share of PF contributions and a central government subsidy. The EPF contributions amount to 24% of a workers’ salary– with both employer and employee contributing an equal 12%. From the employer’s share, 8.33% of the salary is deducted towards the pension scheme. The Centre makes a contribution of 1.16% of salary towards the scheme — the exchequer’s liability on this account has risen from Rs 600 crore in 2004-05 to Rs 1340 crore in 2006-07.
The EPS 1995 had been introduced through an ordinance on November 16, 1995. It was carved out of the Family Pension Scheme 1971, which had a surplus. The 1971 scheme didn’t allow commutation of pension or premature withdrawals....
More from Frontpage
| Single Page Format | Previous - 1 - 2 - 3 |
Discuss this story on expressindia forums
|
|
 |
 |
 |
About Us | Contact Us | Advertisers | Site Map | Make us your homepage | Work for Us | RSS | Subscribe | Electronic Edition | Privacy Policy© 2009: The Indian Express Limited. All rights reserved throughout the world
