EPF introduced the “Additional Benefit Scheme” to its members in July, 2004. Under this scheme, retired EPF member are entitled to have a 0.75% of total PF Deposit each year as additional benefit along with the withdrawal of their PF Deposit. However, the additional benefit amount is limited to 15% of total PF deposit or Rs.3 lacs whichever is less.
Prior to the introduction of Additional Benefits Scheme, Periodical Pension Scheme was implemented since April 1996. Considering the long term sustainability of the pension scheme, it was recently been replaced by the additional benefits scheme. Under Periodical Pension scheme, periodic pension at the rate of five percent of the PF refunded to the members on their retirement is paid to them or their heir for a maximum period of nine years.
The EPF has created special reserve funds out of its own earning to finance its additional benefit scheme.