EPF, EPS, EDLI & EPFO — Set 17

Correct Answer: B. Adults and minors (by guardian)

PPF accounts can be opened in the name of adults or in the name of minors by their natural or legal guardian. An individual can open one PPF account in their own name and one as a guardian for a minor. A minor's PPF account matures when they turn 18, at which point the 15-year tenure is counted from the date of account opening.

Correct Answer: B. It provides defined monthly income (pension) for life, not a lump sum

Unlike EPF which provides a lump sum corpus at retirement, EPS provides a defined monthly pension for life after retirement. This is a defined benefit element that ensures income security in old age. The combination of EPF (lump sum) and EPS (monthly pension) together form a comprehensive retirement benefit package.

Correct Answer: C. EPFO member portal and UMANG app both

EPF e-passbook can be downloaded from the EPFO member portal (passbook.epfindia.gov.in) as well as through the UMANG app. The e-passbook shows all contribution credits, interest, and debit entries. It serves as the official digital record of an EPF member's accumulated savings.

Correct Answer: C. Rs 18 lakh crore

EPFO manages a corpus of approximately Rs 18-20 lakh crore (approximately USD 220-240 billion) as of 2023, making it one of the largest retirement fund managers globally. The corpus grows annually as new contributions exceed claim disbursements. EPFO's investment returns directly determine the interest credited to members' accounts.

Correct Answer: C. Basic wages + Dearness Allowance + Retaining Allowance

EPF contributions are calculated on 'basic wages' which includes basic pay, dearness allowance (DA), and retaining allowance if any. HRA, overtime, bonus, commission, and certain other allowances are generally excluded. The Supreme Court's Surya Roshni judgment (2019) addressed inclusion of certain other allowances in basic wages for EPF computation.

Correct Answer: B. EDLI is not payable — member must be in active service

EDLI benefit is payable only in case of the death of an EPF member while in active service (contributing to EPF). If a member has resigned and is not contributing to any EPF account at the time of death, EDLI insurance is not payable. EPS family pension similarly applies only for members who die while in service or after completing eligible service.

Correct Answer: A. VPF can be withdrawn anytime; PPF has a 15-year lock-in

VPF (which is part of EPF) can be withdrawn upon leaving employment or after 2 months of unemployment, making it more flexible than PPF. PPF has a mandatory 15-year lock-in period with limited partial withdrawals from year 7. VPF thus offers more liquidity while earning the same (or higher) interest rate as PPF.

Correct Answer: B. Interest on EPF contributions above Rs 2.5 lakh per year is taxable from FY 2021-22

From FY 2021-22, the Union Budget introduced taxation on EPF interest earned on employee contributions exceeding Rs 2.5 lakh per year. For government employees (who can contribute to GPF), the threshold is Rs 5 lakh. This change primarily impacts high-income employees who made large VPF contributions to exploit the EEE status of EPF.

Correct Answer: B. 1952

The Employees' Provident Fund Scheme was launched in 1952 under the EPF and Miscellaneous Provisions Act of the same year. It initially covered about 6 industries and has since expanded to cover virtually all organised sector industries. The scheme marked the beginning of formal social security for industrial workers in independent India.

Correct Answer: B. EPF dues are secured creditor claims taking priority over most other creditors

Under the Insolvency and Bankruptcy Code (IBC) and the EPF Act, EPF dues of workers are classified as 'workmen dues' and take priority over unsecured creditors in liquidation. The EPF Act also has provisions to attach employer's property to recover outstanding contributions. This priority status protects workers' retirement savings even when employers become insolvent.