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Employees Provident Fund
is enacted to provide a kind of social security to the industrial workers. The security, however, differs from the security provided to them under the Workmen's Compensation Act or the Employees' State Insurance Act. Provident Fund is a Social Security Benefit to employees. During an employee’s productive life he along with his employer contribute monthly to a PF Fund which then serves as a nest on retirement for his/her old age. This act is an important piece of Labour Welfare legislation enacted by the Parliament to provide social security benefits to the workers.

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THE EMPLOYEES' PROVIDENT FUND

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is enacted to provide a kind of social security to the industrial workers. The security, however, differs from the security provided to them under the Workmen's Compensation Act or the Employees' State Insurance Act. The Employees' Provident Funds and Miscellaneous Provisions Act mainly provides retirement or old age benefits, such as Provident Fund, Superannuation Pension, Invalidation Pension, Family Pension and Deposit Linked Insurance.

 

Provision for terminal benefit of restricted nature was made in the Industrial Disputes Act, 1947, in the form of payment of retrenchment compensation. But this benefit is not available to a worker on retirement, on reaching the age of superannuation or voluntary retirement.

 

The Employees' Provident Funds and Miscellaneous Provisions Act is intended to provide wider terminal benefits to the industrial workers. For example, the Act provides for payment of terminal on reaching the age of superannuation, voluntary retirement and retirement due to incapacity to work.

 

 

Provident Fund Registration

(Employer’s Code No. & PF Nomination Formalities)

Apply for PF Registration

(PF Employer’s Code No.)

Prepare the application for Registration

(Annex. 1- Contains Application Format, List of supporting.)

Submit the Application to PF Office

PF Office conducts Inspection at CRC Premises

PF Office allots (1) PF Code No. & (2) Section No.

On obtaining PF Code No, prepare Form 9

(Annex 2 - Details of Employees)

Employee fills

(1) Form 2 (Annex 3 – Employee PF Nomination Form) &

(2) Form 11 (Annexure 4 -Declaration Form)

Submit Form 9 & Form 2 to PF Office

The Form 11 is maintained in the Employee Personal File Informs employee about PF A/c number. This is also reflected In the monthly pay slip. Now begin maintaining the (Annex 5 - PF Eligibility Register)

Form Descriptions

1. Form 9 – Employee Details, which are self-explanatory. In this form the ASR to allot each employee a PF A/c number, typically starting from 1, 2, 3……

2. Form 2 - Employee Nomination Form which again gives employee details. This form is mainly used to know the nominee details.

3. Form 11 – Declaration Form, which gives previous employment PF account details. 4. PF Eligibility Register consists of (a) Employee Information, (b) Employee PF/Pension Registration, Nomination and A/c details. (Consultant to maintain)

Services Provided by us :

  • Coverage of establishments under Employees' Provident Fund (EPF)
  • Obtaining EPF Registration / EPF Code Number
  • Preparation & submission of applicable Forms with the relevant EPF Office.
  • Preparing EPF Challans & Depositing monthly EPF Contributions on behalf of the establishment
  • Preparation & filing of periodical returns as may be required under EPF Act / Schemes
  • Preparation & Maintenance of Statutory Registers & Records as required under EPF Act / Schemes
  • Preparation & Maintenance of Inspection Note Book, Annual Contribution Statement, Pass Book
  • Assistance in ensuring / complying various provisions of the Act related to disclosures, notices, displays, deductions, forfeiture etc.
  • Furnishing of particulars of change in ownership / management of the establishment
  • Providing day to day consultancy on matters pertaining to EPF, pension scheme & EDLI scheme
  • Assistance to employees in Withdrawals from EPF
  • Assistance to employees in Transfer of EPF Accumulation
  • Assistance to employees of establishment in claiming widow pension, family pension , children pension under employee pension scheme
  • Assistance employees in claiming / obtaining superannuation pension
  • Assistance at the time of inspection / enquiries conducted under the Act
  • Correspondence / Liaisoning with concerned EPF Department / Office
  • Replying Show Cause Notices issued under EPF Act
  • Clearing the Balance Sheet from the EPF Authority
  • Manage and appear in the 7A case proceedings

 

CHECK LIST

Eligibility

Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment.

 

Applicability

  • Establishment which is factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed.

  • Any other establishment employing 20 or more persons which Central Government may, by notification, specify in this behalf.

  • Any establishment employing even less than 20 persons can be covered voluntarily under section 1(4) of the Act.

   

Payment of Contribution

The employer shall pay the contribution payable to the EPF, EDLI and Employees' Pension Fund in respect of the member of the Employees' Pension Fund employed by him directly by or through a contractor.

It shall be the responsibility of the principal employer to pay the contributions payable to the EPF, EDLI and Employees' Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

Clarification about Contribution

After revision in wage ceiling from Rs.6500 to Rs.15000 w.e.f. 1.6.2001 per month, the government will continue to contribute 1.16% upto the actual wage of maximum Rs.15000 per month towards Employees’ Pension Scheme. The employer’s share in the Pension Scheme will be Rs.1250 w.e.f. 1.6.2001.

 

Under Employees’ Deposit-Linked Insurance Scheme the contribution @ 0.50% is required to be paid upto a maximum limit of Rs.15000.

The employer also will pay administrative charges @ 0.01% on maximum limit of Rs.15000 whereas an exempted establishment will pay inspection charges @ 0.005% on the total wages paid.

Notes:

The above clarification is given by taking wages upto a maximum of Rs.15000 towards wage (basic+DA).

Since an excluded employee i.e. drawing wages more than Rs.15000 can also become member of the Fund and the Schemes on joint request and if, for instance, such an employee is getting Rs.17, 000 per month, his share towards provident fund contribution will be Rs.2040 e.g. 12% and employer’s share towards provident fund contribution will be Rs.790 and Rs.1250 towards Employees’ Pension Fund.

 
   
 

Benefits

Employees covered enjoy a benefit of Social Security in the form of an unattachable and unwithdrawable (except in severely restricted circumstances like buying house, marriage/education, etc.) financial nest egg to which employees and employers contribute equally throughout the covered persons’ employment.

This sum is payable normally on retirement or death. Other Benefits include Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme.


The following three kinds of benefits are provided under the scheme: (1) Withdrawal benefit (2) Benefit of non-refundable advances (3) Benefit of financing of Life Insurance Policies.

  • A member can withdraw the full amount standing to his credit in the Fund in the following circumstances immediately
  • Retirement after attaining the age of 55 years
  • Retirement due to incapacity for work
  • Migration for permanent settlement abroad
  • Mass retrenchment
  • Voluntary retirement
  • Closer of establishment
  • Transfer to an establishment not covered under the Act
  • Discharge with payment of retrenchment compensation, etc
  • In all other cases of leaving services he can withdraw the full amount if he remains unemployed after the waiting period of two months unemployment.
  • Non-refundable advances from the amount standing to the credit of a member in the Fund can be sanctioned for the following purposes:
  • Purchase of a house,
  • Repayment of a loan, for housing,
  • Unemployment due to lock-out or temporary closure
  • Unemployment due to illness
  • Marriage of a self of daughter, son, sister or brother
  • Education of son or daughter
  • Exceptional calamity, etc.
   
 

Rate of Contribution

Scheme Employee's Employer's Central Govt.
Provident Fund Scheme 12%

Amount>8.33% (in case where contribution is 12% of 10%)
10% (in case of certain Establishments as per details given earlier)

NIL
Insurance Scheme NIL 0.5% NIL
Pension Scheme NIL

8.33%(Diverted out of Provident Fund

1.16%
 
   

EPF Challan Contributions :

A/c – 1 : Epf employers 12% + employees 3.67% = 15.67 %

A/c – 2 : Epf admin charges = 1.10%

A/c – 10 : Eps employees =  8.33 %

A/c – 21 : Edli = 0.50 %

A/c – 22 : Edli admin charges= 0.01%

Total = 25.61%

Rate of Contribution:

Employee Provident Fund Employees share

12%

Employee Provident Fund Employer share

3.67%

Employees’ Pension scheme

8.33%

Employee Deposit Linked Insurance

0.5%

Employee Provident Fund Administrative charges

0.01%

Employee Deposit Linked Insurance Administrative charges

0.01%

 
 
 
 
 
 
Damages  
  • Less than 2 months
@ 5% p.a.
  • Two months and above but less than upto four months
@ 10% p.a.
  • Four months and above but less than upto six months
@ 15% p.a.
  • Six months and above
@ 25%-100% p.a. 
 
 
 
 
   
 

Penal Provision

  • Liable to be arrested without warrants being a cognizable offence.

  • Defaults by employer in paying contributions or inspection/administrative charges attract imprisonment upto 3 years and fines upto Rs. 10,000.00 {Section 14}

  • For any retrospective application, all dues have to be paid by employer with damages upto 100% of arrears.