Comparison in the returns between Employees Provident Fund and New Pension Scheme
Returns on EPFO fund is difficult to compare with return on other Pension Schemes like New Pension Scheme.
With an important message, a written reply was submitted in Lok Sabha 4th March, 2013 by the Minister of State for Labour and Employment Shri. Kodikunnil Suresh about the returns on NPS as follows...
"The wage ceiling for mandatory provident fund contributions under the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952 is Rs. 6,500/-.
Data of workers outside the wage limit is not maintained by the Employees’ Provident Fund Organization.
EPF money is invested as per the investment pattern of 2003 notified by Government of India which allows investment in Central Government Securities, State Government Securities, Bonds of Public Sector Undertakings and Private sectors. Returns on EPFO fund is difficult to compare with return on other Pension Schemes like New Pension Scheme.
The declaration of the return of NPS is on the basis of the accounting policy prescribed by NPS which allow the NAV to be declared on the basis of current market value of the investments. While EPFO follows the cost value of the investment for accounting its investment and return is declared on the basis of actual receipt of interest on the investments.
The return on EPFO investments are fixed whereas the return on NPS are not fixed and fluctuates on daily basis depending on the prevailing market conditions".