The Employees' Provident Fund Organisation (EPFO) has hiked the interest rate on Employees' Provident Fund (EPF) contributions to 8.65 per cent for the year 2018-19 from the previous rate of 8.55 per cent, while the interest rate for both the Public Provident Fund (PPF) and the General Provident Fund (GPF) are 8 per cent. The hike will provide private sector employees more retirement benefits than before. Moreover, in comparison to PPF and GPF, EPF has more features and the higher rate will make the retirement fund even sweeter. So, if the same amount is contributed, with higher interest rate, EPF will generate more retirement corpus for a private sector employee than PPF, in which any earning person may contribute, and GPF, which is available for government employees who joined their services before January 1, 2004. Apart from accumulation of retirement corpus in provident fund (PF), let's discuss the features of the scheme. Employees' Provident Fund (EPF) EPF is aimed at providing retirement benefits to the private sector employees, which is compulsory in organisations having 20 or more employees having monthly basic salary of Rs 15,000 (the figure is revised periodically) or less, and optional for employees earning more. As the part of the scheme, 12 per cent of the basic salary (including basic wages, retaining allowance and dearness allowance (DA), including the cash value of any food concession) is deducted every month as PF contribution from the salary, while the employer makes a matching contribution of 12 per cent and the Central government also contributes 1.16 per cent of eligible basic salary. There are also tax benefits u\/s 80C on employee\u2019s contribution, even if it is more than 12 per cent of basic salary, and employer\u2019s contribution up to 12 per cent of the basic salary or Rs 15,000 per month, whichever is less. Out of the total contributions made, 15.67 per cent goes to EPF, 8.33 per cent to Employee\u2019s Pension Scheme (EPS), 0.5 per cent for employees\u2019 deposit linked insurance (EDLI), 0.85 per cent for EPF administrative charges and 0.01 per cent for EDLI administration charges. Provident Fund (PF): Out of the total contributions, PF attracts a major part of 15.67 per cent, which is transferred to a trust that manages the PF money. The accumulated contributions and interest earned (which is now hiked to 8.65 per cent per annum) constitute the total value of the fund. PF may be withdrawn at the time of retirement, termination or change in job. The PF money will be tax free, if withdrawal is made after 5 continuous years of service. Employee\u2019s Pension Scheme (EPS): If an employee retires at the age of 58 after rendering eligible service of 10 years or more, he\/she will be eligible for pension, which is calculated by the following formula: X=AxB\/70 (where X=monthly pension, A=pensionable salary, B=pensionable service) Further, the pensionable salary is average monthly pay drawn during the contributory period of service in the span of 12 months preceding the date of exit from the membership of the PF. Normally, the maximum pensionable salary is limited to Rs 15,000 per month, unless if at the option of the employer and employee, contribution is paid on salary exceeding Rs 15,000 per month from the date of commencement of this scheme or from the date salary exceeds Rs 15,000, whichever is earlier, and 8.33 per cent share of the employer thereof is remitted into the pension fund. On the death of the member, the family (that is spouse and thereafter two below-25 children) is entitled to receive monthly family pension. One may also opt for early pension if he\/she retires at an age of 50 after rendering eligible service of 10 years or more, but the amount of pension will be reduced by 4 per cent for each year if taken in advance before 58 years of age. Employees\u2019 Deposit Linked Insurance (EDLI): It is a social security scheme, which provides insurance cover to the family of employees to protect them from hardship in case of unfortunate death of an employee during active service. Based on the last drawn salary (basic plus DA) of the employee, the death claim amount under EDLI is calculated as 30 times the salary, along with bonus, which would be 50 per cent of the balance in the PF account or Rs 1.5 lakh, whichever is less. The maximum sum insured would be Rs 6 lakh.