Salient Features

Employees Provident Funds and Miscellaneous Provisions Act, 1952 (EPF&MP Act, 1952)
The Employees Provident Fund was instituted by an Act of Parliament in 1952 for providin the social security benefits to the wor! force en a ed in non" overnment sector# The Employees Provident Funds and $iscellaneous Provisions Act% 1952 and the &chemes framed thereunder have been structured as self"applyin and the employers of the establishments are responsible to report compliance of their own# The three schemes framed are iven below' 1.

2. '.

Employees Provident Funds Scheme, 1952 Employees Deposit-Lin ed !nsur"nce Scheme, 19#$ %EDL!& "nd Employees Pension Scheme, 1995 %EPS& %E"rlier the Employees F"mily Pension Scheme, 19#1&

The primary ob(ect of these three schemes is to provide social security and to inculcate amon st the wor!ers a spirit of savin s while they are ainfully employed and to ma!e provision for their benefit after they retire from service and for their family members after their death

Employees Provident Funds Scheme, 1952

The Employees Provident Funds &cheme% 1952 was introduced in )ovember 1952 to provide old"a e and post service financial support to the wor!ers in eneral employed in *ndustrial + ,ommercial &ector establishments# The scheme provided for provident fund system on contributory basis by the Employers and the Employees at e-ual rate# *t made available to the employee concerned the accretions in the Provident Fund a.c with interest in lump sum on retirement or leavin the (ob# Establishment employing 20 or more employees Applicability
As per Para 26(2) of the Employees Provident Fund cheme! "#$2! every employee employed in or in connection with the work of a factory or establishment other than an e%cluded employee shall entitled and re&uired to become a member of the Fund from the date of 'oining the factory or establishment

Employee includes following persons also: (") (2) Employed by or through the contractor in or in connection (ith the (or) of the establishment Engaged as an apprentice! not being an apprentice under the Apprentices Act! "#6"

Excluded Employee
An employee of the *ompany to (hom both the follo(ing t(o conditions apply at the time of 'oining the services of the *ompany a) +is,+er Pay is more than -s. 6$00,/ per month b) 0oes not have any current PF,EP 1alance under EPF 2 3P Act! "#$2 Voluntary Coverage: 4he establishment is allo(ed the coverage under the provisions of the Act on voluntary basis (ith the consent of ma'ority of the employees.

*ontribution of Employee

!" of the #ay

5 6Pay7 includes basic (ages 8 (ith dearness allo(ance! retaining allo(ance55 (if any)! cash value of food concession! and also on Leave Encashment 8 $asic %ages means all emoluments (hich are earned by an employee (hile on duty or on leave or on holidays (ith (ages in either case in accordance (ith the terms of the contract of employment and (hich are paid or payable in cash to him! but does not include/ the cash value of any food concession9 any dearness allo(ance (that is to say! all cash payments by (hatever name called paid to an employee on account of a rise in the cost of living)! house/rent allo(ance! over/ time allo(ance! bonus! commission or any other similar allo(ance payable to the employee in respect of his employment or of (or) done in such employment9 Any presents made by the employer

55 &etaining allowance means allo(ance payable for the time being to an employee of any factory or other establishment during any period in (hich the establishment is not (or)ing! for retaining his service V'()*+,&- C'*+&.$)+.'*: 3ember shall be at liberty to ma)e voluntary contribution

Employer can not reduce /#ay0

"

3inimum PF *ontribution: "2; of the Pay 3a%imum PF *ontribution: "00; of the Pay

1 +ax $enefits to the contribution are applicable as per .ncome +ax &ules

Employers *ontributions

E&ual to "2; of the Pay of employee #ension Fund 2E#S) / <.==; of Pensionable alary #ensionable Salary: #ay or &s3 45667- whichever is less #rovident Fund / "2; of the Pay minus EP

Amount Payable to -egional Provident Fund *ommissioners office

(") (2) (=) (@) ($) (6) (C)

"2; of the Pay! Employees Provident Fund *ontribution / ,7c *o3 8 >oluntary Provident Fund *ontribution ? ,7c *o3 8 "2; of the Pay minus EP ! Employer Provident Fund! / ,7c *o3 8 <.==; of the Pensionable alary (EP )/,7c *o3 8 6 "."0; of the Pay! PF Admn. *harges/3inimum -s. $,/pm! ,7c *o3 8 ! 0.$0; of Pensionable alary for E0AB contribution/ ,7c *o3 8 ! 0.0"; of Pensionable alary for E0AB administrative charges ? 3inimum -s. 2,/pm.! A 7c *o38!!

*he&ue in Fvg. of / State $ank of .ndia 8 E#F ,7c

Bnterest on Accumulation

Provident

fund

(") "2; Dpto =0/06/2000 (2) ""; from "/C/2000 to ="/0=/200" (=) #.$; from 0"/0@/200" to ="/0=/200$ (@) <.$0 ; from 0"/0@/200$ on(ards 8 Bnterest is calculated on the monthly running balance of the member 8 Bnterest on provident fund accumulations e%empt from income ta%

4ype of Advance accumulations

from

PF

". 2. =. @. $. 6. C. <. #. "0. "". "2. "=. "@. "$. "6. "C.

Purchase d(elling site *onstruction of a d(elling house *ompleting construction of the house 1uy a d(elling house ,Flat from Agency Purchasing a ne(ly constructed,old d(elling house or flat from an individual Purchasing house,flat from a promoter Additional Aoan /alterations,improvements Further housing (ithdra(al -epayment housing loan Eithdra(al on $@ Fears or (ithin " year before actual retirement *losure or loc)out,non/receipt of (ages for a continuous period of 2 months etc. Further advance in case of closure or loc)/out of establishment, factory for more than 6 months Advance for illness of member and his family For marriage! or post matriculation education Property damaged by a nature calamity Bf 3embers affected by cut in the supply of electricity 3ember physically handicapped

#F ,dvance Conditions and #F forms - PowerPoint file enclosed

Gomination
a) b) c) d) e)

P F L O AN AN D F OR M S

An employee may be allo(ed to ma)e a nomination conferring on one or more persons the right to receive the provident fund amount Bf an employee nominates more than one person! he shall! in his nomination specify the amount or share payable to each of the nominees. Ehere an employee has a family at the time of ma)ing a nomination! the nomination shall be in favour of one or more persons belonging to his family Any nomination made by an employee in favour of a person not belonging to his family shall be invalid. Bf at the time of ma)ing a nomination the employee has no family! the nomination may be in favour of any person or persons

f)

A nomination made by an employee may, at any time, be modified by filing Form no. 2

g) Ehere the nomination is (holly or partly in favour of a minor! the 3ember may! appoint a ma'or person of his Family to be the guardian of the minor nominee Provided that (here there is no ma'or person in the Family! the 3ember may! at his discretion! appoint any other person to be a guardian of the minor nominee. 6Family7 means: / For #rovident Fund 2#F9: -

(i) (ii)

in the case of a male member! his (ife! his children! (hether married or unmarried! his dependent parents and his deceased sons (ido( and children9 Bn the case of a female member! her husband! her children! (hether married or unmarried! her dependent parents! her husbands! dependent parents! her deceased sonss (ido( and children9

For #ension Fund 2E#S9: (i) (ii) (iii) Eife in the case of male member of the Employees Pension Fund9 +usband in the case of a female member of the Employees Pension fund9 and ons and daughters includes child legally adopted by the member belo( 2$ years of age

Eithdra(al from the Fund

3ember is entitled to (ithdra( full amount: /

Hn retirement from service. Hn retirement on account of permanent and total incapacity for (or) due to bodily or mental infirmity. Bmmediately before migration from Bndia for permanent settlement abroad or for ta)ing employment abroad Hn termination of service in the case of mass or individual retrenchment Hn termination of service under a voluntary scheme of retirement After two months of resignation. In case of no employment

1 , member of the Fund shall continue to be a member until he withdraws under aforesaid conditions

Aast date of transfer of contribution to -PF* Aast date of filing monthly return (ith -PF* (Form no. 12A, 5, 10) Aast date of filing Annual return (ith -PF* (Form no. =A! 6A) ignature of Authorised person for PF 3atters Bntimation for change of o(nership in (Form Go. $A) 3inimum time -PF* ta)e to settle the claim 4ime for issue Annual tatement of accounts

Payment of dues in any branch of tate 1an) of Bndia (ithin 5th days from the close of every month !5th days from the close of every month :6th ,pril pecimen signature of authorised person for(arded to PF office immediately! after coverage 2 (henever there is a change in For(arded to PF office immediately after coverage 2 (henever there is a change in the o(nership! it has to be intimated within 5 days of change ;5 to 46 days from the date of receipt of claims in PF office 4he annual statement of accounts are issued to the employees by :6th September of the follo(ing year Error in the account slip if any! should be reported for correction (ithin si% months

<ust collect duly filled and signed following forms from new employee at the time of =oining: Form No. 2 --Nomination form Form No. 11 Declaration of previous employer & PF and Pension amount Form No. 13 PF Transfer from previous employer

 M st collect following details from ALL !ontractors"

Mont ly

)ame% PF and E&* no# of (LL the ,ontract Employees on letter head Ac!nowled e copy of monthly challan# Attendance &heet of ,ontract Employees
Form no# /A 0Annual 1eturn2 %3i hli htin the employees )or in*+)or ed in the ,ompany

-early

,s per #ara :4$ of the Employees> #rovident Fund Scheme? @5! 2Auties of Contractors9
Every contractor shall! (ithin seven days of the close of every month! submit to the principal employer a statement sho(ing the recoveries of contributions in respect of employees employed by or through him and shall also furnish to him such information as the principal employer is re&uired to furnish under the provisions of the scheme to the *ommissioner.

Bnterest and damage transfer of PF dues

on

delay

2 9 .nterest u7s BC 8 !" per annum

2!9 Aamages:
Aess than 2 months 2 months 2 above but less than @ months @ months 2 above but less than 6 months i% months 2 above

D B" per annum D !!" per annum D !B" per annum D :B" per annum

Employees Deposit Lin ed !nsur"nce Scheme, 19#$ %EDL!&

4he Employees 0eposit Ain)ed Bnsurance cheme! "#C6 provides for payment of assurance benefit! upon death of the member (hile in service9 lin)ed to the average balance in the provident fund account of the deceased member. 4he assurance benefit shall be payable to the person entitled to receive provident fund accumulation of the deceased member.

<embership Contribution

/ All members of Provident Fund

Employees are not re&uired to contribute Employer is re&uired to contribute I 0.$0; of Pensionable alary

$enefits:

'n the death while in service of the member! the nominee of the deceased shall in addition to PF,EP accumulation! be
paid an amount e&ual to the average balance in the PF accumulation of the deceased for the preceding t(elve months and if the average balance e%ceeds -s. =$000,/ then the amount payable shall be -s. =$000,/ plus 2$; in e%cess of -s. =$000,/ sub'ect to a ma%imum of -s. 60!000,/

Employees Pension Scheme, 1995%EPS&

.ntroduction: Bn force from "6.""."##$ retrospectively (ith effect from ".@."##= Employees Pension cheme is a survivor! old age and disability pension scheme. Contribution:
Employee is not re&uired to contribute separately under the Employees Pension cheme "##$. Employer share of Provident Fund *ontribution I <.==; is diverted to Pension Fund

+ype of #ension: 3onthly 3embers Pension Bnvalidity pension Eido( pension

Hn attaining the age of $< years Permanent and total disablement during the course of employment 0eath of member (hether in service or after e%it from employment or after retirement, commencement of monthly member pension Pension for life or until remarriage @

*hildren pension Hrphan pension Gominee pension

Payable to t(o children of deceased member upto the age of 2$ years in addition to (ido(. 4(o orphan children upto the age of 2$ years Bn case of unmarried members! a person nominated by the member (ill get pension e&ual to (ido( pension.

4he cheme covers members death ris) unconditionally ? i.e. irrespective of (hether such death occurs Ehile in service9 a(ay from employment and not contributing to the fund 9or after retirement as a pensioner 4he family members shall remain entitled for pensionary support uniformly

#ension benefits to <ember: For Service below 6 years: -eturn of contribution on e%it from employment as per 4able 0 Aess than 6 months ? *.( +,$(E A
-ear of service ! : ; 5 4 B E @ #roportion of wages at exit 36! !365 :3 6 ;3 E 53!E 43;6 B35; E3B6 @3EE

Service above 6 years but below !6 years

A person is entitled for pension after completing the age of $< years (ith minimum service of "0 years i% months or more shall be treated as one year and the service of less than si% months shall be ignored. Pension (ill be calculated by applying the formula:

#ensionable Salary x #ensionable Service ---------------------------------------------------B6

Service over !6 years:

Full pension according to the formula stated above Hn rendering 20 years of Pensionable service or more! members Pensionable service shall in all cases be increased by 2 years

Commutation of #ension
Hption is available for commutation of Pension *ommutation is permissible upto ",=rd of pension amount *ommuted value (ill be hundred times of pension amount so commuted Dpon commutation! the balance amount of pension payable shall be the monthly pension

Early #ension of Cessation of Employment

Hld age pension on account of superannuation,retirement is normally payable on attaining the age of $< years. +o(ever! member can opt for ta)ing earlier than $< years on his e%it from employment but under no circumstances pension (ill be payable before the age of $0 years. A member (ho desires to dra( monthly pension from a date earlier than $< years of age (ill be allo(ed to dra( a monthly/reduced pension. 4he amount of pension in such a case shall be reduced at the rate of =; for every year the age falls short of $< years.

#ayment of #ension +hrough $ank:

4he pension is disbursed though Gationalised 1an) of the respective tate. 4he member,pensioner are re&uired to open an account in the 1an) (here pension is desired and indicate the option in the application in Form "0/0

Scheme Certificate
$

4here are occasions (hen a member may leave employment and or may move from a covered establishment to an uncovered establishment before he reaches the date of superannuation! he may opt for a cheme *ertificate. 4he certificate (ill indicate his Pensionable salary and the amount of pension due on the date of e%it from employment. Bf the member is subse&uently employed in a covered establishment! his Pensionable service in the scheme certificate (ill be ta)en into account for (or)ing out his full Pensionable service.

%ithdrawal $enefit:
Bf the member renders less than "0 years Pensionable service on the date of e%it or on attaining the age of $< years! (hichever is earlier! he is entitled for (ithdra(al benefits as per 4able J0 or he may opt for scheme certificate .