What is a Provident Fund Scheme?
Provident Fund is a type of savings accounts, on which a guaranteed lump sum plus interest accrued over the accumulated years are paid upon retirement or withdrawal of the employee i.e. resignation of an employee, from the company.
The guaranteed lump sum is accumulated contributions deducted from the monthly salaries of the employees and the employers’ own contributions which are paid over to insurance company regularly as and when deductions are made. These contributions are allocated to the accounts of the individuals covered under the scheme.
Trustees of the Scheme
At least two or three trustees will be required to administer the fund in accordance with the rules.
Provident Fund Record System Maintained
We maintain contribution payment schedules are updated monthly, quarterly, half-yearly and yearly for each scheme member.
At the end of the financial year, interests are allocated to every member. A master contribution payment schedule is also maintained with all previous years’ contributions and interest of the scheme members.
Computation of Interest
Interest earned depends on the date of payment of the contributions, and the ruling rate of interest at the date of investment.
The interest rate fluctuates from time to time and is apportioned according to the date of receipt of payments and when investments are purchased.
Communication Between The Organization And Aureol Insurance Company
Statements are forwarded to the organization regularly for confirmation of the contributions fund balances or as per request.
Withdrawal of Members
On withdrawals, the correspondence is initiated from the organization who informs us with details of the persons withdrawing from the scheme.
- We do a computation of the employee and employers contributions from the time employee joined the scheme to the time of leaving including all interest accrued during the period
- The statement is sent out to the organization for confirmation
- On the confirmation the organization signs our Discharged Form confirming that they are in agreement with the proposed settlement of full and final payment for the employee
- On receipt of the Discharged Form our cheque is prepared and forwarded to the organization for payment to the employee