In this scheme, 12 percent on the employee's salary is deducted by the organization and an equal quantity is contributed by the employer also. It really is carried out in establishments which have got an employee strength of 20 or above. In this case, all of these organizations ought to fall under the jurisdiction on the scheme.
The current rate of interest is 9.5 percent around the deposits created by the employee. The employee may possibly get a pension on his retirement or there is certainly provision for the payment of a fixed amount to his family members on his untimely death.
Uncomplicated distribution of pension is one of the added benefits of this scheme. Beneath this scheme, an employee has to produce an account with any with the registered banks for payment of pension. Following the retirement from the employee, pension is disbursed by the organization to the employee concerned. All banks with tie ups normally present a zero balance account for the pension holders. The pensioners generally get their pension prior to the tenth day of every month.
The problem behind the scheme is its reach. It really is tough to locate all organizations with an employee strength of 20 or above. The organizations need to spend a subscription towards the organization and this subscription rate also prevents the organizations to join the scheme. Nevertheless the government is looking to make the scheme a additional appealing and easy. generally the scheme is a superior tool for social safety.