What is the EPF scheme?Under EPF, any organization / firm having 20 or more employees is subject to provide employment benefits to its employees.The employee has to contribute 12% of his/her basic pay plus dearness allowance to the EPF on a monthly basis. The contribution percentage of the employer is also the same.
Role of a nomineeThe EPF corpus consists of the total contribution and the interest accrued, which is given to the employee at the time of his/her retirement or resignation, whichever is earlier. However, a major concern with EPF is that what happens to the accumulated fund after the death of the employee.
Usually, after the death of the employee, the fund amount is paid to his/her nominee. An EPF member must name a nominee who will receive the EPF fund in case of his/her pre-mature death. An EPF member can even name more than one nominee.
In case of multiple nominees, the EPF member can fix the share of the funds that each nominee will receive post his/her death. If an EPF subscriber has a family, then only a family member can be made a nominee. A non-family member can be named a nominee only if the subscriber does not have a family.
Nominee outside the familyIn absence of a family, an EPF member can make anyone the nominee of the fund. However, if the subscriber acquires a family, the earlier nomination will stand null and void and the same should be transferred in the name of a family member.
If a nomination is made before marriage, the same will become invalid after the EPF member’s marriage. Post marriage, the EPF member will have to make a new nomination. If there is no nomination, then the EPF will be given to the immediate family members.
In case of a situation where there is neither a nominee nor an immediate family member of the deceased EPF member, the fund is given to the legal heir.
In a nutshell, the retirement fund that one builds by contributing to EPF necessarily requires a familial nomination. If one does not have a family, then he/she can make a non-family member the nominee of the fund. If the nomination form is left empty, the EPF fund will be acquired by one’s legal heir.
Click here to visit our personalised online advisor that gives you the financial expertise you need.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
Disadvantages of Early Retirement - What Happens When You're Not Working?
Early retirement seems to be good, many people enjoy life without working especially with extra earnings. But they are not aware about the cons. Lets explore the disadvantages of retiring early to save your retirement life.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.
How To Apply For Personal Loan
Applying for a personal loan has become extremely easy these days. With the increase in applicants, banks and other financial institutions have made the process very simple.