Be it a private company or a Government organisation, employees are considered an important asset. So, every employee gets retirement benefits since they put in hard work to keep an organisation running. To help an employee overcome struggles in the later part of life that is after retirement, organisations provide provident and pension funds. The two terms are different, so let us learn the difference between pension and provident fund.
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Provident Fund |
Pension Fund |
When both employer and employee contribute to the fund while the employee is in employment with the organisation, it is known as the provident fund. |
The fund which is created by the employer in which a specific amount is contributed to help the employee get retirement benefits is known as a pension fund. |
Both employer and employee make the contribution. |
Only the employer and Central Government contributes to the fund. |
The statute of the Provident Employee's Provident Fund Scheme is 1952. |
The statute of the Employee's Pension Fund Scheme is 1995. |
A lump sum amount is received in the provident fund. |
Either a lump sum or a form of regular income can be opted in the pension fund. |
The contribution is made by both parties. |
The pension you receive is based on the average of the last 12 month's salary and years of service. |
A person can withdraw the entire provident fund. |
Only one third amount can be withdrawn. |
This is the difference between provident and pension fund.
I hope you have cleared your doubt regarding the difference between pension and provident fund.
Read more:
What Is Statutory provident fund?
What Is Employee provident fund?
Which pension fund Manager Is Best For NPS?
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Authors Of The Question
What is difference between provident fund and pension fund?
Anusuya Bhattacharjee
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1 Answers
2 Year
2022-08-23T10:41:06+00:00 2022-08-24T18:05:22+00:00Comment
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