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Context:

The Department of Pension & Pensioners' Welfare (DoPPW) issued a clarification to ensure that retired government employees to receive their final General Provident Fund (GPF) payments on time.

About General Provident Fund (GPF)

General Provident Fund (GPF) is a savings scheme introduced in 1960 exclusively for government employees to provide a regular source of income for government employees after retirement.

Mandatory Contributions

Contributions to the GPF are mandatory for government employees. Employees must contribute a set percentage of their salaries to the fund. The minimum contribution is 6% of salary, with a maximum of 100%.

The contributions are deducted automatically from the employee's monthly salary, and the accumulated funds earn interest at a predetermined rate.

Withdraw money before retirement

GPF is flexible, and employees can withdraw funds for a variety of reasons, including marriage, education, and medical emergencies, subject to certain restrictions.

Employees who retire or resign can withdraw the entire amount accumulated in their GPF accounts. If an employee transfers to another government department, they have the option to withdraw or transfer the balance to their new employer.

If passed away

If the employee passes away, the GPF amount will be paid to their nominee in accordance with the rules.

Loan facilities

Employees can make loans against their GPF account, under certain conditions outlined in the GPF rules.

Who manages the GPF scheme?

The scheme is administered by the Department of Pension and Pensioners' Welfare, Ministry of Personnel, Public Grievances, and Pensions.

Unlike the Employees Provident Fund (EPF), which is funded by both the employer and the employee, the GPF requires only the employee to contribute. The government does not make any contributions to the GPF.

Must Read Articles:

General Provident Fund (GPF) Scheme

EPF Benefits

Source:

LIVE LAW

PRACTICE QUESTION

Q.Consider the following statements in the context of the General Provident Fund (GPF):

1. It is available only for government employees.

2. The contributions toward the GPF are made only by the employee.

Which of the above statements is/are correct?

A) 1 only

B) 2 only

C) Both 1 and 2

D) Neither 1 nor 2

Answer: C

Explanation:

Statement 1 is correct:

General Provident Fund (GPF) is a savings scheme established in 1960 that is only available to government employees in India. The main aim of the GPF is to provide a reliable source of income for government employees after they retire.

Statement 2 is correct:

All government employees who have a GPF account can contribute a percentage of their salary to the GPF. Unlike the Employees Provident Fund (EPF), the GPF is only contributed by the employee. At the time of retirement, the employee receives the total amount accumulated during his or her employment.