What is the Difference Between EPF and ETF?

The main differences between EPF (Employee Provident Fund) and ETF (Employee Trust Fund) are their purposes and eligibility requirements:

1. Purpose:

• EPF is a retirement benefits scheme for employees. It is designed to help employees save a portion of their salary every month, which can be used at retirement or in case the employee is no longer fit to work.
• ETF is a long-term investment or savings plan established by the employer for the benefit of employees. It functions under the Ministry of Labour and Trade Union Relations.

1. Eligibility:

• EPF is available to employees of private and government sectors, but migrant workers and self-employers are not entitled to it.
• ETF is available to workers in permanent positions, temporary positions, and on a contract basis, as well as casual workers and shift workers. Migrant workers and self-employers are also entitled to be benefited from the Employee Trust Fund.

Both EPF and ETF are governed by the Ministry of Finance and are considered retirement plans that can benefit employees on their retirement. Employers and employees contribute to both funds. The Employees' Provident Fund (EPF) was established by Act No. 15 of 1958, and employers have to remit an amount equal to 20% of the employee's total earnings to the Fund. The Employee Trust Fund (ETF) requires employers to contribute an amount equal to 3% of the employee's total earnings.

Comparative Table: EPF vs ETF

Here is a table comparing the differences between EPF (Employee Provident Fund) and ETF (Employee's Trust Fund):

EPF is a retirement savings scheme where both the employer and employee contribute equally, building an employee's retirement fund. On the other hand, ETF is a long-term investment plan established by the employer for the benefit of employees, offering market-linked returns.