General Provident Fund:
A single judge bench of the Madras High Court recently held that employees are not automatically entitled to pension benefits based on deductions made under the GPF scheme.
- General Provident Fund (GPF) is a kind of Public Provident Fund (PPF) account that is available only for government employees in India.
- It allows them to allocate a portion of their salaries to their GPF accounts.
- Upon retirement, employees receive the accumulated corpus from their GPF accounts, reflecting their service tenure contributions.
- As per the GPF rules, the following are eligible to subscribe to GPF account:
- All temporary government servants who have given their service for continuously one year
- All re-employed pensioners (except those eligible for admission to the contributory provident fund)
- All permanent government servants
- It is a mandatory scheme for government employees, requiring them to contribute a certain percentage of their salary towards the fund.
- The contributions are deducted from the employee’s monthly salary, and the amount earns interest at a predetermined rate.
- Employees can also increase their GPF deductions as per their choice.
- Employees can withdraw their savings from the fund upon retirement or resignation from service.
- A GPF is flexible, allowing employees to withdraw money from the fund for various reasons, such as marriage, education, and medical emergencies.
- Employees can also take out loans against their GPF account, subject to certain conditions.
- Employees who transfer to another government department or leave their job can withdraw their GPF balance or transfer it to their new employer.
- The GPF sum will be paid to their nominee if the employee passes away.
