The Employees’ Provident Fund Organisation (EPFO) was set up in 1951 to support retirement savings for salaried employees in the organised sector. Any organisation with more than 20 employees must contribute to the EPF. Both employers and employees are represented on the Central Board of Trustees, which ensures contributions follow government guidelines.

However, over 1,200 large corporations and PSUs in India are exempt from directly contributing to EPFO. Instead, they establish their own Exempted Provident Fund Trusts (EPFTs). These trusts are managed internally by representatives of both the employer and employees and are governed under the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952.

The objective behind EPFTs is to provide employees with better returns and greater flexibility compared to the standard EPF. Decisions around fund management, investments, and withdrawals are made within the organisation, often leading to more efficient outcomes.

Alongside EPFT, you can secure part of your savings with Bajaj Finance Fixed Deposits that offer up to 7.30% p.a. returns, ensuring stability irrespective of market conditions. Open FD.

Exempted PF Contributions

In EPFTs, both employer and employee contribute 12% of the salary plus dearness allowance, just like in EPF. Out of this, 8.67% from the employer’s share goes into the Employees’ Pension Scheme (EPS).

The key difference is that EPFTs allow employee contributions above the standard 12%, depending on financial goals. Employers in EPFTs also pay a significantly lower administrative charge (0.18% vs. 1.1% in EPFO).

These funds are managed internally and can be invested across various avenues such as government bonds, securities, equities, or even mutual funds, aiming for higher returns compared to EPFO.

Looking for predictable growth?

With Bajaj Finance FD, your money grows at assured rates, unaffected by market fluctuations—ideal for balancing risks in your portfolio. Book an FD today with as low as Rs. 15,000.