Amendments in relation to PF

w.e.f. 01.09.2014

1

Increase in wage ceiling limit from Rs. 6,500/- to Rs.

15,000/-under the Employees’ Provident Funds and

Miscellaneous Provisions Act, 1952 (PF Act)

DKM Online Private Limited

www.dkmonline.com Press – F5

Contents 2

Slide Number

Recent Amendments 3

New Joinees – EPS applicability 4

Pension calculation 5

Minimum Pension 6

EDLI Benefit 7

Effect on Companies depositing dues under PF Act on Full Basic PayBasic Pay includes Basic Salary + Dearness Allowance + Cash value of food concession + Retaining Allowance (An allowance payable by closed establishment for retaining service)

9 & 10

Effect on Companies depositing dues under PF Act on Wage Ceiling Limit (w.e.f. 01-09-2014 Rs. 15,000/- per month, upto 31-08-2014 – Rs. 6,500/- per month)

12 & 13

Other recent changes – Online PF Payment 14

Social Security Agreement with Czech Republic 15

Recent Amendments 3

Ministry of Labour and Employment vide Gazette Notification

dated 22-08-2014 has increased statutory wage ceiling Limit for

Provident Fund, Pension Fund and EDLI from Rs. 6,500/- p.m. to Rs.

15,000/- p.m.

The amendments come into force w.e.f. the September 1, 2014 i.e.

September, 2014 months’ dues under PF Act which will be

deposited on or before October 15, 2014.

Notification~Wage Ceiling- Rs.15000

New Joinees – EPS applicability 4

Effect of new EPS amendment for new PF Members having Basic Pay more than Rs.15,000/- on or after 01-09-2014. (New PF Members means who do not have active PF a/c on or before 31-08-2014)

EPS will be applicable only if employee basic pay is not more than Rs.15,000/- per month on or after 01.09.2014.

The entire employer and employee contribution shall remain in the Provident Fund (A/c-1) and no diversion to EPS (A/c 10) shall be made for any new PF member on or after 01-09-2014 having Basic Pay more than Rs. 15,000/-.

If employee is already a PF member, he/she will continue to be PF Member if his/her Basic Pay crosses Rs. 15,000/- per month during the course of his/her service / career. But EPS contributions would be restricted to 8.33% of Rs. 15,000/- i.e. Rs.1,250/- per month.

Career means if he has joined from previous company with EPS membership, he will have to continue with his EPS membership in new company also. Even if he has crossed Rs.15,000 Basic pay.

Pension calculationNo action expected from Co. side

5

For calculating pension, Pensionable Salary shall be the average monthly pay for 60 months. Previously it was 12 months.

W.e.f. 01-09-2014, the provisions for pension contribution on higher salary (more than wage ceiling limit (Rs. 15,000/-) has been deleted and as such no new options can be allowed to any member of EPS 1995 on and after 01-09-2014.

Wherever employer & employees have opted to contribute on salary exceeding Rs. 6,500/- per month, such employer and employees will have to exercise a fresh option within a period of 6 months to contribute on salary exceeding Rs. 15,000/- per month subject to the condition that such member would have to contribute towards the Government’s share of contribution @ 1.16% on the salary exceeding Rs. 15,000/- per month from his/her share of contribution.

Minimum Pension 6

Minimum Pension as per Gazette Notification dated 19-08-2014

Member’s Pension : Minimum pension Rs. 1,000/- per month

Window(er)/Nominee/Dependent parents Pension

: Minimum pension Rs. 1,000/- per month

Children’s Pension : Minimum pension Rs. 250/- per month per child i.e. 25% of widow pension

Orphan’s Pension : Minimum pension Rs. 750/- per month per child i.e. 75% of widow pension

EDLI Benefit 7

Maximum EDLI benefit amount has been increased from Rs. 1,30,000/- to Rs. 3,60,000/- where the date of death of the member occurs on or after 01-09-2014.

Formula – (Basic Pay and Rs. 15,000/- whichever is less x 20) x 120%

If Basic Pay Rs. 20,000/- (Rs. 15,000 x 20 ) x 120% = Rs. 3,60,000/-

If Basic Pay Rs. 10,000/- (Rs. 10,000 x 20 ) x 120% = Rs. 2,40,000/-

Effect on Companies depositing dues under PF Act on Full Basic PayRefer - Slide 9 & 10

8

Basic Pay ~ Rs. 20,000 9

A/c No.

Rate PF/EPS/EDLI

Salaryw.e.f.

01-09-14

Member of EPS before

01-09-2014

No Membership of EPS before 01-09-2014

Calculation upto 31-08-

2014

Employees’ Share

1 12% 20,000 2,400 2,400 2,400

Employer’s Share

1 12%-EPS 20,000 1,150 2,400 1,859

Pension Fund-EPS

10 8.33% 15,000 1,250 ZERO 541

PF Admn. Charges

2 1.10% 20,000 220 220 220

PF Inspection Charges-in case of Trust

2 0.18% 20,000 36 36 36

EDLI Contribution

21 0.50% 15,000 75 75 33

EDLI Admn. Charges

22 0.01% 15,000 1.50 1.50 0.65

EDLI Inspection Charges-in case of Exemption

22 0.005% 15,000 0.75 0.75 0.33

Basic Pay ~ Rs. 10,000 10

A/c No.

Rate PF/EPS/EDLI

Salaryw.e.f.

01-09-14

Member of EPS before

01-09-2014

No Membership of EPS before 01-09-2014

Calculation upto 31-08-

2014

Employees’ Share

1 12% 10,000 1,200 1,200 1,200

Employer’s Share

1 12%-EPS 10,000 367 367 659

Pension Fund-EPS

10 8.33% 10,000 833 833 541

PF Admn. Charges

2 1.10% 10,000 110 110 110

PF Inspection Charges-in case of Trust

2 0.18% 10,000 18 18 18

EDLI Contribution

21 0.50% 10,000 50 50 33

EDLI Admn. Charges

22 0.01% 10,000 1.00 1.00 0.65

EDLI Inspection Charges-in case of Exemption

22 0.005% 10,000 0.50 0.50 0.33

Effect on Companies depositing dues under PF Act on Wage Ceiling Limit (w.e.f. 01-09-2014 Rs. 15,000/- per month, upto 31-08-2014 – Rs. 6,500/- per month)

Refer - Slide 12 & 13

11

Basic Pay ~ Rs. 20,000

A/c No.

Rate PF/EPS/EDLI

Salaryw.e.f.

01-09-14

Member of EPS before

01-09-2014

No Membership of EPS before 01-09-2014

Calculation upto 31-08-

2014

Employees’ Share

1 12% 15,000 1,800 1,800 780

Employer’s Share

1 12%-EPS 15,000 550 1,800 239

Pension Fund-EPS

10 8.33% 15,000 1,250 ZERO 541

PF Admn. Charges

2 1.10% 15,000 165 165 72

PF Inspection Charges-in case of Trust

2 0.18% 15,000 27 27 12

EDLI Contribution

21 0.50% 15,000 75 75 33

EDLI Admn. Charges

22 0.01% 15,000 1.50 1.50 0.65

EDLI Inspection Charges-in case of Exemption

22 0.005% 15,000 0.75 0.75 0.33

12

Basic Pay ~ Rs. 10,000

A/c No.

Rate PF/EPS/EDLI

Salaryw.e.f.

01-09-14

Member of EPS before

01-09-2014

No Membership of EPS before 01-09-2014

Calculation upto 31-08-

2014

Employees’ Share

1 12% 10,000 1,200 1,200 780

Employer’s Share

1 12%-EPS 10,000 367 367 239

Pension Fund-EPS

10 8.33% 10,000 833 833 541

PF Admn. Charges

2 1.10% 10,000 110 110 72

PF Inspection Charges-in case of Trust

2 0.18% 10,000 18 18 12

EDLI Contribution

21 0.50% 10,000 50 50 33

EDLI Admn. Charges

22 0.01% 10,000 1.00 1.00 0.65

EDLI Inspection Charges-in case of Exemption

22 0.005% 10,000 0.50 0.50 0.33

13

Other recent changes in PF Act 14

Online Provident Fund Payment

EPFO has started facility to pay EPF payment online. This facility is for those Establishments who have net banking facility with Banks.

For more details Please visit at https://www.onlinesbi.com/prelogin/epfohome.htm

Online Payment Process Flow

Other recent changes in PF Act 15

Social Security Agreement with Czech Republic The Government of India has entered into an agreement of Social Security with Czech

Republic w.e.f. 1st September 2014. Social Security Agreement with Czech Republic is available at http://www.epfindia.com/Circulars/Y2014-15/IWU_SSA_CzechRepublic_13648.pdf

SUMMARY OF ALL SOCIAL SECURITY AGREEMENTS

Sl. No. Country Assignment Period Effective Date

1 Belgium 5 Years 01 September 2009

2 Germany 4 Years 01 October 2009

3 Switzerland 6 Years 29 January 2011

4 Denmark Indian Employees sent to Denmark : 5 YearsDanish Nationals posted in India     : 3 Years

01 May 2011

5 Luxembourg 5 Years 01 June 2011

6 France 5 Years 01 July 2011

7 South Korea 5 Years 01 November 2011

8 Netherlands 5 Years 01 December 2011

9 Hungary 5 Years 01 April 2013

10 Finland 5 Years 1st August 2014

11 Sweden 2 Years 1st August 2014

12 Czech Republic 5 Years 1st September 2014

16