The key difference between EPF and ETF is that EPF is a retirement benefits scheme for employees that is maintained by the Employee’s Trust Fund Organization, whereas ETF is a long-term investment plan that is established by the employer for the benefit of employees.
Both Employee Provident Fund and Employee’s Trust Fund are governed by the Ministry of Finance. They can be considered as retirements plans that can benefit employees on their retirement. Furthermore, both employers and employees contribute to the Employee Provident Fund as well as Employee Trust Fund.
CONTENTS
1. Overview and Key Difference
2. What is EPF
3. What is ETF
4. EPF vs ETF in Tabular Form
5. Summary – EPF vs ETF
What is EPF (Employee Provident Fund) ?
Employee Provident Fund (EPF) is a fund given by employers to the employee at the retirement age. Both employer and employee contribute to the EPF allowance. This scheme is maintained under Employee’s Trust Fund Organization, and it was established under the Employee’s Provident Act in 1958. this organization is governed and controlled by the Central Bank of Sri Lanka and the Ministry of Finance. The contribution offered by the employer for the Employee Provident Fund is 12% of the basic wage. On retirement, the employee is credited with his contributed amount plus the shared amount of the employer.
What is ETF (Employee Trust Fund)?
Employee Trust Fund (ETF) was established under Act No 46 of 1980. Employee Trust Fund promotes the welfare, social security, and financial security of employees. It provides financial benefits for the employees upon their retirement. The fund is administered by the Employees’ Trust Fund Board, which is governed by the Ministry of Finance, Sri Lanka.
Those who work in permanent positions, temporary positions, contract basis, and casual are eligible for Employee Trust Fund. Moreover, workers who are employed in both public and private sectors are entitled to be received the Employee Trust Fund. Not only the workers from public and mercantile sectors but also migrant workers and self-employed people can also contribute to the Employee Trust Fund on their own by obtaining membership in the Employees’ Trust Fund Board. Employee Trust Fund can be considered as a long-term saving plan to be benefited on the stage of retirement. Both employers and employees contribute to the Employee Trust Fund.
What is the Difference Between EPF and ETF?
EPF stands for Employee Provident Fund, whereas ETF stands for Employee’s Trust Fund. Although EPF is administered by Employee’s Trust Fund Organization, ETF is operated under Employee Trust Fund Board. The key difference between EPF and ETF is that the benefit of EPF can only be taken by employees of the private sector and government sector, whereas the benefit of ETF can be obtained by workers in permanent positions, temporary positions, and on a contract basis and casual basis. Migrant workers and self-employers are entitled to be benefited from the Employee Trust Fund.
The following table summarizes the difference between EPF and ETF.
Summary – EPF vs ETF
The key difference between EPF and ETF is that Employee Provident Fund is administered under Employee Trust Fund Organization, whereas Employee Trust Fund is administered under Employee Trust Fund Board. EPF is a scheme of retirement that can benefit employees on their retirement, whereas ETF is a long-term investment plan that is established by the employer for the benefit of the employees. Nevertheless, employees are able to entertain both Employee Provident Fund and Employee Trust Fund at the stage of retirement though they work in government bodies or non-government bodies.
Reference:
1. “What Is EPF.” Employees Provident Fund, Central Bank of Sri Lanka.
2. “Employees’ Trust Fund Board.” EMPLOYEES TRUST FUND BOARD.
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1. “Retirement, retirement-planning” (CC0) via Pixabay