What Really Is EPF & ETF?

As young adults entering the workforce, terms like Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF) may often fly over our heads. We stumble forward in our professional lives with merely a vague understanding of what they are and all it entails. What’s at the forefront of our minds is our total take-home pay, after all, deductions are made, forgetting that in a few years we will accumulate a tidy little fund.

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You can consider EPF as your social security scheme, a large one at that. According to the EPF Act, you, as an employee, have to contribute 8% of your salary each month to this fund, while your employer adds a further 12%.

ETF, on the other hand, functions under the Ministry of Labour and Trade Union Relations and is a fund that the employer contributes towards the employee (3% of the employee’s pay is generally how it works).

If in the event, you simply shift jobs during the five year period stipulated on the grounds of marriage, you can claim your funds from your ex-employer, but not from where you are currently employed. “If you decide to withdraw whatever amount you have accumulated in your account during this time from past employers, you will not be able to make another withdrawal unless you migrate or retire,” explained SHAMMAS AMEER, Manager - People & Culture at Capital Media Pvt Ltd.

Further, on the subject of migration, you can only claim your earnings from EPF if you have received permanent residence. “Simply obtaining a work visa/ permit from another country is not sufficient and you will not be eligible to claim this fund,” confirmed Shammas.

Employees’ Trust Fund (ETF)

Claiming ETF can only be done every 5 years up until your last employer. “Once you leave your current employment, you can claim the 3% until that point. After which, you must wait until 5 more years have passed before attempting to make a withdrawal,” said Shammas.

CASHING YOUR DOUGH

Cheque/ Bank Transfer