Employees Provident Fund and Objectives of Provident Fund

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Employees Provident Fund

Karmachari Sanchaya Kosh (KSK) in English Employees Provident Fund (EPF) was applied by Judha Shamsher Rana in 1993 BS.

Later it became Employees Provident Fund Act 2019 BS (it was applied on 31^st Bhadra 2019).

It manages the provident fund (PF) on behalf of Government of Nepal.

All the permanent government employees who work as police, army, civil servant, teachers etc are eligible for provident fund.

Any private sector establishments with more than ten employees are also eligible to become members.

Provident fund is deducted from employee equal to 10% of basic salary.

And equal amount is deposited by government for it.

Suppose, basic salary of government employee is Rs 45,000 per month.

KSK is an approved retirement fund of Government of Nepal.

The KSK helps to manage provident fund on retirement or separation from jobs.

Besides managing provident fund of its customers, it also provides certain social benefits to its contributors.

Besides provident fund management, KSK also provide the following social security benefits: 

·          Accident indemnity

·          Funeral grant

·          Employees welfare scheme (insurance)

·          Participation in profit

KSK also provides loan to its customer at following interest rate:

        Contribution:        7.00%

        Pension fund:       7.00%

        Special loan:         8.25%

        House Loan:          8.50%         (upto Rs 40 lakh)

        Education Loan:   8.50%         (upto Rs 40 Lakh)

        House Loan:          8.75%         (more than Rs 40 Lakh)

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Objectives of Provident Fund

The main features of provident fund are given below:

(a) Provident fund is compulsory for government employees.

(b) KSK invests deposited amount into different organization; a fixed interest or return can be generated from investment.

(c) When employee needs money for special purpose like education of children, construction work, medical etc, he/she can withdraw provident fund.

(d) Nowadays, KSK has invested provident fund into real state for higher return as well as housing for employees.

(e) KSK also provides loan facility to its members etc.

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