(Under the Ministry of Labour and Employment of India) The Employees’ Provident Funds and...

(Under the Ministry of Labour and Employment of India)

The Employees’ Provident Funds andMiscellaneous Provisions Act, 1952

Act No. 19 of 1952

( Effective from 4th March 1952)

Features of the Act…

COMPONENTS: Three schemes.

ADMINISTRATION: Employees' Provident Fund

Organisation (EPFO) under the Ministry of Labour

and Employment (Govt of India).

APPLICABILITY: Employees’ Salary < Rs.6,500 p.m.

JAMMU AND KASHMIR? Not Applicable

Why PF?

SAVINGS IN PF a/c HAPPY RETIREMENT

Why PF Act?

Industrial Employees

& Their Families

Social Security

Timely Monetar

y Assistan

ce

Schemes…

EPF Act

The Employees’ Provident Fund Scheme, 1952

The Employees’ Deposit-Linked

Insurance Scheme, 1976.

The Employees’ Pension Scheme,

1995

Applicability of Act…

•Engaged in industry specified in Schedule-I? (and)•Twenty or more persons employed?

Factory

•Twenty or more persons employed? (or)•Central Government may, by notification in the Official Gazette (after giving not less than two months notice)

Others

Non Applicability of Act…

Act not applicable to

Co-op Societies

Employing less than 50 persons

Working without the aid of power

CG/SG Establishments

Owned/Controlled/Formed under an Act

Employees entitled to the benefit of contributory

provident fund or old age pension

in accordance with any scheme.

in accordance with any rule framed.

(OR)

(OR)

(AND)

(AND)

Salary/Pay

Basic Wages*

Dearness Allowance

Food Concession (Cash Value)

Retaining Allowance

*Basic Wages - Emoluments earned by an employee while on duty or on leave or on holiday with wages in accordance with the terms of the contract of employment and which are paid or payable in cash to him.

Appropriate Government…

Central Government

Establishments belonging to or under

the control of the Central Government

An establishment connected with a

railway company, a major port, a mine or

an oil field or a controlled industry

An establishment having departments or branches in more

than one State

State Government

Other Establishmen

ts

Employer…• The Owner or

Occupier• The Agent of such

owner/occupier• Legal

Representative of deceased owner/occupier

• ManagerFactory

• Person or Authority with ultimate control over establishment’s affairs

• Manager/MD/Managing Agent

Other Establishments

Establishment to which exemption granted U/S 17 from the operation of all or any of the provisions of any Scheme or the Insurance Scheme as

the case may be, either wholly or to a class of Employees “Exempted Establishment”

Employee…

Employed for wages in any kind of work,

manual or otherwise

Who gets his wages directly or indirectly

from the employer

Includes any person

“Working partners drawing salaries or other allowances

are not Employees”

Employed

• Through a contractor

• As an apprentice (Not under the Apprentices Act or under establishment’s standing orders)

• As a part-time employee

• As a sweeper, a night watchman, a gardener, etc

An employee to whom a Scheme or the Insurance

Scheme is exempt by virtue of Exempted Establishment.

“Exempted Employee”

Manufacture/Manufacturing Process…Making, Altering, Repairing,

Ornamenting, Finishing, Packing, Oiling, Washing, Cleaning, Breaking up,

Demolishing or otherwise Treating or Adapting any

Article/Substance

Its use, sale, transport, delivery or disposal

(With a view to)

Other Key definitions…

Factory

• Any premises including the precincts thereof

• Where a manufacturing process is being carried on

• With or without aid of power.

Occupier of a Factory

• Person having ultimate control over the affairs of the factory (or)

• Managing Agent, if any

Superannuation

• Attainment of the age of fifty-eight years

• By Employee (being Member of Pension Scheme)

(Under the The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952)

Employees’ Provident Fund Scheme (1952)


Administration of the Fund is by the Board of Trustees or Central Board

Every employee employed in an establishment to which this scheme applies is required to become a member of the fund from the date of joining the establishment.

An “excluded employee” means (i) an employee (having been a member of the Fund) who withdraws the full amount of his accumulations in the Fund [or] (ii) an employee whose pay at the time be is otherwise entitled to become a member of the Fund, exceeds Rs.5000 p.m. [or] (iii) an Apprentice.

About…

Contribution to EPF Scheme…

By the Employer = 10% or 12%* (Basic wages + dearness allowance + retaining allowance)

Employees may make contribution exceeding the prescribed rate but the employer shall not be under any obligation to contribute over and above the rates prescribed by the Government from time to time under the Act.

*12% where Govt specifically notifies.Each contribution shall be calculated to the

nearest rupee.


Investment in EPF…

The Provident Fund contributions is invested by the Board of Trustees in accordance with the investment pattern approved by the Government of India.

The members of the Provident Fund get interest on the money standing to their credit in their Provident Fund Accounts.

The rate of interest for each financial year is recommended by the Board of Trustees and is subject to final decision by the Government.


Advances from the Provident Fund can be taken for the following purposes subject to conditions laid down under the Scheme.

Non-refundable advances allowed in cases of Medical expenses, Insurance, etc.

Withdrawals allowed for loan repayments, flat purchase, etc.,

Advances from EPF…


Full accumulations with interest thereon are refunded in the event of:

DeathPermanent disabilitySuperannuationRetrenchment Migration from India for permanent settlement or

employment abroadVoluntary retirement, Certain discharges from employment under Industrial

Disputes Act,1947Transfer to an establishment not covered under the Act

Withdrawal from EPF…


In other cases full amount can be withdrawn, with permission of commissioner, when the member ceases to be in employment and has not been employed in any establishment to which the Act applies for a continuous period of atleast 2 months (2 months not considered for

women leaving employment for getting married)

Withdrawal from EPF…



Employees’ Pension Scheme (1995)


Compulsory for all the persons who were members of the Family Pension Scheme, 1971

Minimum 10 years contributory service is required for entitlement to pension.

Normal superannuation pension is payable on attaining the age of 58 years.

Pension on a discounted rate is also payable on attaining the age of 50 years.

The amount of monthly pension will vary from member to member depending upon his pensionable salary and pensionable service.

About…

In the following contingenciesSuperannuation on attaining the age of 58 yearsRetirement Permanent total disablementDeath during serviceDeath after retirement/ superannuation/permanent

total disablementChildren Pension, andOrphan pension.


Payment of Monthly Pension…

In case where the contributory service is less than 20 years but more than 10 years, monthly pension is required to be determined as if the member has rendered eligible service of 20 years. The amount so arrived shall be reduced at the rate of 3% for every year by which the eligible service falls short of 20 years, subject to maximum reduction of 25%.


Calculation of Monthly Pension…

Members Pension = {*Pensionable Salary x (Pensionable Service + 2)} (divided by) 70

[* Pensionable Salary will be average of last 12 months pay]

For the members of the ceased Family Pension Scheme, 1971:

In the case of members who contributed to the Family Pension Scheme for 24 years, the minimum amount of pension will be Rs. 500 per month.

Depending upon the retirement date, the amount of pension for such members may go even beyond Rs. 800 per month.

The Family Pension members retiring in November, 1995 after having membership of only 10 years will also get a minimum pension of Rs. 265 p.m.



The rate of minimum widow pension is Rs. 450 p.m. The rate of children pension is 25 per cent of widow

pension for each child subject to a minimum of Rs. 115 p.m. per child payable upto two children at a time till they attain the age of 25 years.

If there are no parents alive, the scheme provides for orphan pension @ 75 per cent of the widow pension payable to orphans subject to the minimum of Rs. 170 p.m. per orphan.



Under the Pension Scheme, the employees have an option to accept the admissible pension or

reduced pension with return of capital. In the case of employee opting for 10% less pension

than the actual entitlement, the scheme provides for return of capital equivalent to 100 times of

the original pension in the event of death of the pensioner.



The Central Government is also contributing to the Pension Fund at the rate of 1.16% of the wage of the employees.


Employees’ Deposit-Linked Insurance Scheme (1976)

Applicable to all establishments to which the Act appliesAll the employees who are members of the Provident Funds in

both the exempted and the non-exempted establishments are covered under the scheme.

The employees are not required to contribute to the Insurance Fund

The employers are required to pay contributions to the Insurance Fund at the rate of 1% of the salary/pay (as under the Act)

The employers of all covered establishments are required to pay charges to the Insurance Fund, at the rate of 0.01% of the pay of the employee-members for meeting the administrative charges, subject to a minimum of Rs. 2/- p.m.

Employees’ Deposit Linked Insurance Scheme (1995)

The nomination made by a member under the Employee Provident Fund Scheme 1952 or in the exempted provident fund is treated as nomination under this scheme.

In case of death of a member, an amount equal to the average balance in the account of the deceased during the preceding 12 months or period of membership, whichever is less shall be paid to the persons eligible to receive the amount or the Provident Fund accumulations.

In case the average balance exceeds Rs. 50,000, the amount payable shall be Rs. 50,000 plus 40% of the amount of such excess subject to a ceiling of Rs. 1,00,000.

Exemption: Factories/establishments, which have an Insurance Scheme with more benefits than under the statutory Scheme, may be granted exemption, subject to certain conditions, if majority of the employees are in favour of such exemption.

Employees’ Deposit Linked Insurance Scheme (1995)

Determination of Moneys Due from Employers

The powers of determining the amount due from any employer and deciding the dispute regarding applicability of this Act vests with the Central Provident Fund Commissioner, Additional Provident Fund Commissioner, Deputy Provident Fund Commissioner, or Regional Provident Fund Commissioner.

For this, he may conduct such inquiry as he may deem necessary.

The Central Government has constituted the Employees Provident Fund Appellate Tribunal, consisting of a presiding officer who is qualified to be a High Court Judge or a District Judge for the purpose of appeals by an aggrieved person.

Any order made by the Tribunal finally disposing of the appeal cannot be questioned in any Court

About…

By the Central Provident Fund Commissioner or such officer as authorised by him by notification in the Official Gazette in this behalf in the same manner as an arrear of land revenue

the amount of contribution (employers’ and employees’) and any charges for meeting the cost of administering the Fund paid or payable by an employer in respect of an employee employed by or through a contractor, may be recovered by such employer from the contractor.

The authorised officer under this Act shall issue a certificate for recovery of amount due from employer to the Recovery Officer, who can attach/sell the property of employer, call for arrest and detention of employer, etc. for effecting recovery.

Mode of recovery…

An employer shall not reduce directly or indirectly the wages of any employee to whom the Scheme or the Insurance Scheme applies.

Where an employee employed in an establishment to which this Act applies leaves his employment and obtain re-employment in another establishment to which this Act does not apply, the amount of accumulations in the

Fund of the establishment left by him shall be transferred within such time as may be specified by Central

Government in this behalf to his account in the Provident Fund of the establishment in which he is re-employed, if the employee so desires and the rules in relation to that

Provident Fund permit such transfer.

Transfer of Accounts…

Protection against Attachment in a Court of Law…

The amount standing to the credit of any member in the Fund or any exempted employee in a Provident fund shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred.

Neither the official assignee appointed under the Presidency Towns Insolvency Act, 1909 nor any receiver appointed under the Provincial Insolvency Act, 1920 shall be entitled to or have any claim on any such amount.

The same protection is available to the nominee of a deceased member, subject to certain deductions prescribed under the Rules or the Scheme.

EPFO Web Portal: www.epfindia.gov.in EPFO Head Office

EPFO Web Portal Features

Hope this Presentation is useful!

(Feel free to post your valuable comments and queries. In case of any mistakes, please mention the Slide No. for easy identification.)

Vasudevan.V (Vasee)

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