EMPLOYEES PROVIDENT FUND ORGANISATION by 4ZznGy

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									EMPLOYEES PROVIDENT FUND ORGANISATION


INTRODUCTION :

Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 comprises of
following three Scheme : -

               -       Employee’s Provident Fund Scheme 1952
               -       Employee’s Deposit-Linked Insurance Scheme 1976
               -       Employee’s Pension Scheme 1995 ( earlier the Family Pension Scheme )


OBJECTIVE :

Employee’s Provident Fund Scheme 1952 provides for contributory Provident Fund :
Employee’s Pension Scheme 1995 which replaced the erstwhile Employee’s Pension
Scheme, 1971 from 16.11.1995 provides for monthly pension and Employee’s Deposit-
Linked Insurance Scheme 1976 provides insurance cover to the worker in the unfortunate
event of the death of the worker.

The primary objective of these three Schemes is to provide social security and to inculcate
amongst the worker a spirit of savings while they are gainfully employed and to make
provision for benefit after they retire from service and for their family members after their
death. To the employers, they provide a steady labour force, which is essential for the
productivity and prosperity of the establishment. To the Government, they provide fund of
considerable magnitude for utilisation on various projects and programmes designed to
promote economic and social development of the country and well being of it people.


EMPLOYEE - DEFINATION

“Employee” as defined in Section 2(f) of the Act means any person who is employed for
wages in any kind of work manual or otherwise, in or in connection with the work of an
establishment and who gets wages directly or indirectly from the employer and includes any
person employed by or through a contractor in or in connection with the work of the
establishment.

MEMBERSHIP

All the employee’s ( including casual, part time, daily wage contract etc...) other than an
excluded employee are required to be enrolled as members of the fund from the day, the Act
comes into force in such establishments.




BASIC WAGES
“Basic Wages” means all emoluments which are earned by an employee while on duty or or
leave or on holidays with wages in either case in accordance with the terms of the contract of
employment and which are paid or payable in cash, but does not include.

          i.    the cash value of any food concession.
          ii.   any dearness allowance ( that is to say, all cash payment by whatever name
                called paid to an employee on account of a rise in the cost of living ), house
                rent allowance, overtime allowance, bonus, commission or any other similar
                allowance payable to the employee in respect of employment or of work
                done in such employment.
         iii.   any present made by the employer.


EXCLUDED EMPLOYEE

“Excluded Employee” as defined under para 2(f) of the Employee’s Provident Fund Scheme
means an employee who having been a member of the fund has withdrawn the full amount
of accumulations in the fund on retirement from service after attaining the age of 58 years.

                                       Or

an employee whose pay exceeds Rs. 5000/- p.m. at the time, otherwise entitled to become a
member of the fund.


EXPLANATION

‘Pay’ includes basic wages with dearness allowance, retaining allowance, ( if any) and cash
value of food concessions admissible thereon.


EMPLOYEES PROVIDENT FUND SCHEME

Employee’s Provident Fund Scheme takes care of following need of the members :

  i.   Retirement
 ii.   Medical Care
iii.   Housing
iv.    Family obligations
 v.    Education of Children
vi.    Financing of Insurance Policy

HOW THE EPF SCHEME WORKS

As per amendment dated 22.09.1997 in the Act, both the employees and employers
contribute to the fund at the rate of 12% of the basic wages, dearness allowance and
retaining allowance, if any, payable to employees per month. The rate of contribution is 10%
in case of the following establishments :

        i. Any covered establishment with less than 20 employees.
      ii. Any sick industrial company as defined in clause ( O ) of Sub-Section 3 of the Sick
          Industrial Companies ( Special Provisions ) Acts, 1985 and which has been
          declared as such by the Board for Industrial and Financial Reconstructions.
     iii. Any establishment which has at the end of any financial year accumulated losses
          equal to or exceeding its entire networth.
     iv. Any establishment in the (a) Jute (b) Beedi (c) Brick (d) Coir and (e) Guar gum
          Industries/ Factories.

The contribution under the Employee’s Provident Fund Scheme by the employee and
employer will be as under with effect from 22.09.1997.



               CONTRIBUTION AS PERCENTAGE OF WAGES

Name of the Scheme                    Employee                       Employer

Provident Fund Scheme                 12%                            3.67% (amount in
                                                                     excess of 8.33%)

                                      10% (in case of                1.67% (amount in
                                      certain                        excess of 8.33%)
                                      establishment as
                                      per details given
                                      above)


EPF INTEREST RATE

The rate of interest is fixed by the Central Government in consultation with the Central
Board of Trustees, Employees Provident Fund every year during March/April. The interest
is credited to the members account on monthly running balance with effect from the last day
in each year. The rate of interest for the year 1999 – 2000 has been notified as 12%.

BENEFITS

A. A member of the Provident Fund can withdraw full amount at the credit in the fund on
   retirement from service after attaining the age of 58 years. Full amount in Provident
   Fund can also be withdrawn by the member under the following circumstances:

   i. A member who has not attained the age of 58 year at the time of termination of
      service.
  ii. A member is retired on account of permanent and total disablement due to bodily or
      mental infirmity.
 iii. On migration from India for permanent settlement abroad or for taking employment
      abroad.
 iv. In case of mass or individual retrenchment.
B. In case of the following contingencies, the payment of provident fund be made after
   completing a continuous period of not less than two months immediately preceding
   the date on which the application for withdrawal is made by the member.

  i. Where employees of closed establishment are transferred to other establishment,
     which is not covered under the Act.
 ii. Where a member is discharged and is given retrenchment compensation under the
     Industrial Dispute Act, 1947.

WITHDRAWAL BEFORE RETIREMENT

A member can withdraw upto 90% of the amount of Provident Fund at credit after attaining
the age of 57 year or within one year before actual retirement on superannuation whichever
is later.

Claim application in Form 19 may be submitted to the concerned Provident Fund Office.

PARTIAL WITHDRAWAL / ADVANCES

A member of Provident Fund is allowed non- refundable advances for the following
contingencies :

        i. For acquiring immovable property.
       ii. Advances in special cases such as lock out in factory / establishment , where a
           member has challenged the retrenchment / dismissal by the employer in al Court
           of Law.
      iii. For treatment of illness.
      iv. For marriages or post matriculation education of children.
       v. Under abnormal conditions such as damage or immovable property by calamity of
           exceptional nature.
      vi. Financing of member’s Life Insurance Policy.

The partial withdrawals are allowed on completion of minimum of 5 years of membership of
the fund and such other certain conditions for house building 7 years of membership in
other cases.

Claim application in Form 31 may be submitted to the concerned Provident Fund Office.

ACCUMULATIONS OF A DECEASED MEMBER

A amount of Provident Fund at the credit of the deceased member is payable to nominee /
legal heirs.

Claim application in Form 20 may be submitted to the concerned Provident Fund Office.
TRANSFER OF PROVIDENT FUND ACCOUNT

Transfer of Provident Fund account from one region to other, from Exempted Provident
Fund Trust to Unexampled Fund in a region and vice-versa can be done as per Scheme.

Transfer application in Form 13 may be submitted to the concerned to the Provident Fund Office.

NOMINATION

The member of Provident Fund shall make a declaration in Form 2, a nomination conferring
the right to receive the amount that may stand to the credit in the fund in the event of death.
The member may furnish the particulars concerning himself and his family. These particulars
furnished by the member of Provident Fund in Form 2 will help the Organisation in
building up the data bank for use in the event of death of the member.

ANNUAL STATEMENT OF ACCOUNTS

As soon as possible and after the close of each period of currency of contribution, annual
statement of accounts will be sent to each member through employer of the factory or other
establishment where the member was last employed. The statement of accounts in the fund
will show the opening balance at the beginning of the period, amount contributed during the
year, the total amount of interest credited at the end of the period or any withdrawal during
the period and the closing balance at the end of the period. Member should satisfy
themselves as to the correctness of the annual statement of accounts and any error should be
brought through employer to the notice of the concerned Provident Fund Office within 6
month of the receipt of the statement.

EMPLOYEES DEPOSIT – LINKED INSURANCE SCHEME 1976

Employee’s Deposit –Linked Insurance Scheme was notified with effect from 01.08.1976.

APPLICABILTY

Scheme is applicable to all the members of the Employee’s Provident Fund Scheme 1952.

MEMBERSHIP

All members of Employee’s Provident Fund Scheme are deemed to be the members of
Employee’s Deposit-Linked Insurance Scheme 1976 , unless exemption has been obtained
for Employee’s Deposit-Linked Insurance Scheme, in favour of Life Insurance Corporation
policy as approved.

CONTRIBUTION

Employees are not required to contribute under Employee’s Deposit–Linked Insurance
Scheme.
The employer is required to contribute at the rate of 0.5% of the wages of the members on
which the Provident Fund has been paid.
BENEFITS

Benefits under Employee’s Deposit-Linked Insurance Scheme 1976 are payable to the
person who is entitled to receive the provident fund of the deceased member. On the death
of the member of the Employee’s Provident Fund, the claimant is paid an amount equal to
the average balance in the account of provident fund during preceding 12 months or during
the period of membership whichever is less, except where the average balance exceeds
Rs.25000/- plus 25% of the amount in excess of Rs.25000/- subject to a maximum of
Rs.35000/-.

Application for claiming benefits under Employee’s Deposit – Linked Insurance Scheme may be made in
Form No. 5 (IF).


EMPLOYEE’S PENSION SCHEME, 1995

INTRODUCTION

Employee’s Pension Scheme 1995 has been made applicable on 16.11.1995 respectively with
effect from 01.04.1993. This new Scheme replaces the erstwhile Family Pension Scheme
1971.

MEMBERSHIP

       i. Every member of the Employee’s Provident Fund Scheme 1952 and opted for
          Employee’s Family Pension Scheme 1971.
      ii. All new entrants to the Employee’s Provident Fund Scheme 1952 will become
          member of the Employee’s Pension Scheme 1995 on compulsory basis.
     iii. Every employee who has ceased to be a member of the Employee’s Family
          Pension Scheme 1971 during 01.04.1993 and 15.11.1995 was given option to
          become of the Employee’s Pension Scheme 1995 upto 31.03.1998.
     iv. Every existing member of the Employee’s Provident Fund Scheme 1952 not being
          member of Family Pension Scheme 1971 has option to become member of
          Employee’s Pension Scheme, 1995.

OPTION REQUIREMENT

       i. Members who have died during 01.04.1993 and 15.11.1995 shall be deemed to
          have exercised option of joining Employee’s Pension Scheme 1995 with effect
          from the date of death.
      ii. Members who are alive may exercise option to become member of the
          Employee’s Pension Scheme 1995 on the date of exit from the employment by
          depositing amount alongwith interest at the rate of 8.5% per annum from the date
          of such withdrawal.
     iii. Members will have option to join Employee’s Pension Scheme 1995 by depositing
          the contribution along with uptodate interest under ceased Employee’s Family
          Pension Scheme 1971 with effect from 01.03.1971.
CONTRIBUTION

Employee is not required to contribute separately under the Employee’s Pension Scheme
1995.
Employer share of Provident Fund Contribution at the rate of 8.33% is diverted to Pension
Fund every month.


SERVICE FOR PENSION

Actual service rendered after 16.11.1995 together with the service for which the
contribution has been made under the ceased Family Pension Scheme 1971, if any will be
treated as service for pension.

A person is entitled for pension after completing the age of 58 years with minimum service
of 10 years.

Six month or more shall be treated as one year and the service less than six months shall be
ignored.

DETERMINATION OF PENSIONABLE SALARY

Pensionable salary shall be the average monthly pay drawn in any manner including on piece
rate basis during the contributory period of service in the span of 12 months preceding the
date of exit from membership of the Employee’s Provident Fund.

BENEFITS

               Monthly Member Pension         -   Superannuation pension/retirement on
                                                  attaining the age of 58 years.
               Pension Scheme Certificate -       Document indicating Pensionable service
                                                  and the amount of reduced pension on the
                                                  date of exit from employment which shall
                                                  be counted for determination of pension
                                                  along with fresh service where the member
                                                  has not attained the age of retirement.
               Invalidity Pension         -       In case of permanent and total disablement
                                                  during the course of employment.
               Widow Pension              -       Pension from the date following the date
                                                  of death of the member whether in service
                                                  or after exit of employment or after
                                                  retirement/commencement of monthly
                                                  member pension.
               Children Pension           -       Pension to two children of deceased
                                                  member up to the age of 25 years in
                                                  addition to widow.
               Orphan Pension             -       Two orphan children up to the age of 25
                                                  years entitled for monthly orphan pension
                                                     equal to 75% of the amount of widow
                                                     pension.
                Nominee Pension                -     In case of unmarried members, a person
                                                     nominated by the member will get pension
                                                     equal to widow pension.



COMMUTATION OF PENSION

Pension shall be allowed for commutation with effect from November 1998. Member can
opt for commutation up to a maximum of one third of pension.

A member can apply for Pension Claim in Form 10D.


WITHDRAWAL BENEFITS

A member is allowed withdrawal benefit where a minimum of pensionable service of 10
years has not been rendered on the date of exit / on attaining age of 58 years.

Application for claiming benefits under Employee’s Pension Scheme may be made in Form No. 10 C.


TIPS FOR MEMBERS : -

       Do not close the Bank Account mentioned in claim form till the payment
        from the Provident Fund Office is received.
       Do not hand over claim form to any unauthorised person.


ADDRESS :

REGIONAL OFFICE :                                          ACCOUNT OFFICE :
BHA VISHYANIDHI BHAWAN                                     VASHI RAILWAY STATION
341, BANDRA ( EAST )                                       6 TOWERS,
MUMBAI – 400 051.                                          NAVI MUMBAI.

								
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