Employees can now choose from PF or New Pension Scheme

Now onwards, the subscribers of the Employees’ Provident Fund (EPF) may choose from two of the options: the EPF and the New Pension Scheme (NPS).

The employees having income below a level, may also opt for not depositing his part of the PF contribution. The employees will also have the choice of opting the Employees’ State Insurance (ESI) or a Health Insurance Product.

Finance minister Arun Jaitley announced that with respect to the EPF, the employee needs to be provided two options. Firstly, the employee may opt for the EPF or the NPS. Secondly, for employees below a certain threshold of monthly income, contribution to the EPF should be optional, without affecting or reducing the employer’s contribution.

He said, with respect to the ESI, the employee should have the option of choosing either the ESI or a Health Insurance product, recognised by the Insurance Regulatory Development Authority.

The Finance minister announced that he intends to bring amending legislation in this regard, after stakeholders’ consultation.
The Labour Ministry is ready with the proposed changes in the Employees’ Provident Fund Organization Act  and they are likely to be tabled in Parliament in the budget session.

However, the amendments are being revisited by the trade unions.