THE ACT IS A SOCIAL WELFARE LEGISLATION

To provide for the institution of Provident Funds,

Pension Fund and Deposit Linked Insurance Fund.

Besides a monthly stream of income, the EPF subscription entitles the member of the Fund to an insurance cover on his life through the Employees Deposit Linked Insurance Scheme.

Objective:
This act is a social security legislation which provides three schemes i.e..

1. Family Pension (Family Pension Fund Scheme)

2. Provident Fund (Provident Fund Scheme)

3. Insurance to Employees (Employees Deposit Linked Insurance Scheme).

WAGE COMPONENTS OF PF

1. BASIC PAY
2. DEARNESS ALLOWANCE (on acc of rise in cost of living) 3. CASH VALUE OF FOOD CONCESSION 4. RETAINING ALLOWANCE

EMOLUMENTS EARNED BY THE EMPLOYEE

While on duty On leave with wages Not on leave encashment Not on House rent allowance Not on Bonus Not on OT Not on any presents made by the employer

 The Act applies to Every establishment in which 20 or more are employed.

Apprentices are not covered under the EPF Act.

Contributions Details Employers Share account 12%of Basic which is deposited in EPF

Employees share 12% on Basic Of this 8.33% on max of 6,500 (Basic) goes to Pension Fund
Rest of 3.67 % goes to EPF Account

Description of the Head

EPF

Head of Accounts
A/c No: 1

Employees Employers Remarks Contribution Contribution

12% 3.67%

FP

A/c No: 10

8.33%

Wage Ceiling is Rs.6500/-

Admin. Charges

A/c No: 2

1.10%

EDLI

A/c No: 21

0.50%

EDLI Admn Charges

A/c No: 22

0.01%

If Basic is 5,000 FPF = 417

EPF = 783(600+183)
If Basic is 8,000 FPF = 541 EPF = 1379(960+419)

CIRCUMSTANCES IN WHICH ACCMULATIONS ARE PAYABLE BY WAY OF FINAL SETTLEMENT

1. On retirement from service after 55 years 2. Retirement due to permanent total disablement incapable for work

3. Migration from India for permanent settlement abroad

4. Termination due to mass or individual retrenchment

5. On Voluntary retirement scheme

6. Termination of job and upon joining an establishment not covered by PF

Purpose
Marriage of self, son, daughter, brother, sister / Education of self, son, daughter Medical treatment of self or family Construction or purchase of house / Repayment of housing loan Purchase of site/plot Addition/alteration oh house/Repair of house

Completed Years
7 years

Maximum Amount of loan

50 % of employees share

Other Conditions
3 times in service

No minimum service condition 5 years

Lesser of 6 times of monthly wages or full employee share 36 times of monthly wages

For specified illnesses Only once in service

5 years 5 Years/10 years after construction

24 times of monthly wages 12 times of monthly wages

Only once in service Only once in service

Purpose

Completed Years No minimum service condition No minimum service condition

Maximum Amount of loan Monthly wages multiplied by months closed 90% of total employee and employer shares

Other Conditions When wages for atleast 2 months not paid Only once in service, at least 54 years of age, 1 year before retirement

Lockout or closure of establishment Withdrawal prior to retirement

FAMILY MEANS
Spouse And Children Father and mother are dependants only

EDLI
For this, organization contributes 0.5% of monthly Basic Pay, capped at Rs 6500, as premium. Payment is linked to the balance in his PF Account.

According to the latest rules, the members cover amount is higher of the two 20 times the average wages of the past 12 months (Upto 6,500 per month), i.e Rs 1,30,000 Or the full amount in his PF account upto 50,000 + 40% of the balance amount.

EMPLOYEES PENSION SCHEME 1995

Came into effect from 16th November 1995 To provide old age and post service support to workers

On Contributory basis 8.33% on employer share restricted to 6,500 Basic + DA

Earlier it was Family Pension Scheme 1971

EMPLOYEES PENSION SCHEME 1995

I For Member

Pension Payment for life on Retirement / Superannuation

Pension Payment for life on invalidation during employment Capital return on option formula basis upon cessation of members pension payment

EMPLOYEES PENSION SCHEME 1995

I To Family Members upon Death of the Member

1. To Spouse for life or until remarriage.

2. To children (two at a time) till they attain the age of 25 years additionally along with pension to spouse. - For total and permanently disabled children pension for life
3. Orphan Pension to children at higher rate upon cessation of Pension Payment to Spouse.

OPTION
Revised pension during life time pensioner with return of capital on his death Revised pension during members life reduced pension during widows lifetime and then return of capital to nominee Pension for fixed period of 20 years not withstanding whether the member lives for that

REDUCED PENSION
90% of original monthly pension

RETURN OF CAPITAL
100 times of original monthly pension on death of member to the nominee 90 times of original monthly pension on death of widow/remarriage to the nominee

90% of original monthly pension to the member. On his death 80% of the original monthly pension to the widow 87.5% of the original monthly pension for a fixed period of 20 years. The pension will cease thereafter

100 times of original monthly pension at the end of 20 years from the date of commencement of pension to the member if he is alive, otherwise to his nominee