Employees Provident Fund
Applicability of
Employees Provident Fund
Eligibility for
Employees Provident Fund
Payment of Contribution
Benefit of Employer
Provident Fund
Clarification about
Contributions
Rates of Contribution
Benefits of
Provident Fund under the Scheme
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 Employee's 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 super annuation 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.
Applicability of
Employees Provident Fund
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.
Eligibility for
Employees Provident Fund
Any person who is employed for work of an establishment or employed
through contractor in or in connection with the work of an
establishment.
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.
Benefit of Employer
Provident Fund
Employees covered enjoy a benefit of Social Security in the form of
an un-attachable and un-withdraw able (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.
Clarification about
Contributions
After revision in wage ceiling from Rs.5000 to Rs.6500 w.e.f.
1.6.2001 per month, the government will continue to contribute 1.16%
upto the actual wage of maximum Rs.6500 per month towards Employees
Pension Scheme. The employers share in the Pension Scheme will be Rs.541
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.6500.
The employer also will pay administrative charges @ 0.01% on maximum
limit of Rs.6500 whereas an exempted establishment will pay inspection
charges @ 0.005% on the total wages paid.
Rates of Contribution
Employees Contribution
12% of basic + DA subject to maximum of Rs. 6500/- towards provident
fund scheme, nil towards insurance scheme, nil towards pension fund
scheme.
Employer Contribution
12% of basic + DA subject to
maximum of Rs. 6500/-, out of which 8.33% is segregated and
credited to the Employees Pension Fund in Account No. 10, 0.5%
towards insurance scheme. The employer is also required to pay
administrative charges at the rate of 1.10 percent of the pay
payable to the employees in respect of which provident fund
contributions are payable
Central Government
Contribution- 1.16% towards Employees Pension Fund.
Benefits
of Provident Fund under the Scheme
The following three
kinds of benefits are provided under the scheme:
Withdrawal benefit
Benefit of non-refundable advances
Benefit
of financing of Life Insurance Policies.
Withdrawal Benefit
(a) 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 58 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
(b) In all the order cases of leaving services he can
withdraw the full amount if he remains unemployed after the
waiting period of two months unemployment.
.Benefit of
Non-refundable Advances: Non-refundable advances from the amount
standing to the credit of a member in the Fund can be sanctioned
for the following purposes:
1. purchase of a house,
2. repayment of a loan, for housing,
3. unemployment due to lock-out or temporary closure,
4.
unemployment due to illness,
5. marriage of a self of of daughter, son, sister or brother,
6.
education of son or daughter,
7. exceptional calamity, etc.
8. withdrawal for investment in
Varishta Pension Bima Yojana.
We are providing professional services for:
To know more details and avail services , please e-mail to contact@businesswonder.com.