3rd AIMA-ICRC Case Writing Competition & Conference, 2023       
Case Study


Dutta Debolina , Ojha Abhoy
Compensation (1806), Social Security Scheme (1475) , Provident Fund,


The Employee Provident Fund Scheme (EPFS) had been established as a social security scheme for the Indian industry and has established a huge corpus through its 42 million contributors. At a relatively risk-free rate of nearly 8.75% return, EPFS is recommended as a good retirement product in the debt portfolio. However, administration of the scheme had come under considerable criticism, which had resulted in changes in the regulatory norms around the scheme.

The government’s interest in promoting a defined contribution approach to retirement benefits appears to work at cross-purposes with the interest of the low-income employees. With recent regulatory changes in the minimum contribution level, the effect on bottom-of-the-pyramid employees covered by this scheme further reduces their net income.

 The case discusses the impact of changes in the regulatory scheme on all employees, but more specifically on the lower income workforce, the financial impact for organizations. It debates the efficacy of the current social security scheme in India and the options for organizations to design and administer variable compensation structures adapted to individual and life-stage needs.

Learning Objective

 The case raises the crucial question of the effectiveness of the EPFS in meeting its desired objectives and addresses three principal issues. 

  1. Inflexibility of the scheme to address the needs of the lower income workforce who are not necessarily concerned about long-term savings while they struggle to make ends meet with their low incomes.
  2. Change in the regulatory framework resulting in a financial impact on both employees and organizations.

Strategic approach for organizations to look at structuring their compensation frameworks to customize to individual and life-stage needs


  • Pub Date:
    08 Jan 2016
  • Source:
  • Discipline:
    Human Resource Management
  • Product#:
  • Keywords:
    Compensation (1806), Social Security Scheme (1475) , Provident Fund,
  • Length:
    Pdf : 12 page(s) ,

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