(FE)
The Employees’ Provident Funds and Miscellaneous Provisions Act 1952 initially provided only for the institution of provident funds. That is why Employees Provident Fund Organisation is so named and does not include the words ‘pension’ or ‘insurance’. The Act was amended in 1976 to bring in two new schemes, namely Family Pension Scheme and Employees’ Deposit Linked Insurance Scheme. The Act of 1952 was again amended in 1996 to bring in Employees’ Pension Scheme (EPS)—valid retrospectively from November 16, 1995—in place of the Family Pension Scheme. EPS was implemented in a hurry. Per se, it is a very beneficial scheme for the employees. It is one of the few pension schemes that provide defined fixed benefits without any linkage to the returns at all. It is one of the main reasons that actuaries evaluated this scheme to be highly deficit, it being as high as Rs 70,000 crore at one point of time. It has survived only because more than 75% of the members did not know about the benefits the scheme provided and withdrew the funds at a discount.
