In an era where employers consider social benefits like PF, ESIC, Leave Wages, Bonus, Gratuity etc as a dead investments towards employees and employees who are unaware of the benefits they can claim through such social benefits, its time to bridge the gap between mandatory legal compliances & self motivated compliances.
Benefits of PF:
Every month an employee contributes 12% of his gross income (Basic + DA) towards his PF account and similarly an employer contributes 8.33% towards the Pension Account and 3.67% towards the PF Account, 0.5% towards the Deposit Linked Insurance Fund (DLIF) of the employee. So from the employee point of view in addition to the interest rate (pre decided by the Central Government), he gets double of the amount saved by him.
The core purpose of the employee pension scheme is to provide superannuation pension, retiring pension or permanent total disablement pension to the employees or widow or widower’s pension, children pension of orphan pension payable to the beneficiaries of such employees.
The purpose of employee DLIF is to provide life insurance benefits to the employees such as on the death of the employee while in service a lump sum insurance amount is payable to his nominee or family member. Also the insurance amount is equal to the average balance in the account of the deceased employee in the Provident Fund during a period of 12 months immediately preceding his death subject to a ceiling of Rs 130000/-..
Most importantly PF helps as an helping arm to the employee in critical situations such as medical treatment, repayment of housing loans, repair of house, purchase of plots, natural disasters etc.
Stay tuned to demystify more such benefits in the upcoming weeks.
(The Author leads HR Operations and Employee Engagement at Kaarya Facilities)