Provident Fund has come into force to give better future to employees on their retirement & his dependants in case of his death during employment The Employees Provident Funds Act 1952 is compulsory contributory fund for the future of an employee after retirement or for his dependents in case of his early death Act is applicable to all states of India except Jammu and Kashmir

PF Act is an important labor legislation which came into existence in 1952 to ensure compulsory PF, family pension fund and deposit linked insurance in factories and other establishment for the benefits of employees. The legislation of PF in industrial and under taken was discussed in which representative of central and state Govt., employer and worker participated.

The Employees Provident Funds Ordinance, 1951 was promulgated by the President of India under the constitution in November, 1951. A scheme under the Act was framed by the Central Government in September1951In exercise of the powers conferred by Section 6-A of the Employees Provident Fund Act,1952 ,the Central Government has maid Employees Family Pension Scheme in 1972. It may be further observed that in exercise of powers conferred by Section 6-C of the Employees Provident Fund Act, 1952, the Central Government has made Employees Deposit linked Insurance Scheme in 1976.

PF

GPF

CPF

EPF

OBJECTIVES & AIMS OF THE ACTThe Employees Provident Fund Act, 1952 was brought on the statute book for providing for the institution of provident fund for the workmen in factories and other industrial establishments. The basic purpose of the Act was to provide provident funds and to make provision for future of the workmen after his retirement or his dependents in case of his early death. In order to achieve this ultimate object the Act is designed to cultivate among the workers a spirit of saving something regularly and also to encourage stabilization of a steady labour force in the industrial centres.

Schedule II of the act specifies in matters which are to be included under this scheme. These include1. 2. 3. 4. 5.

Time and manner of paying contribution Payment of cost of administration by employer Conditions for withdrawals from the funds Rate of interest payable Maintenance of records and registers etc.

Every industry employing 10 or more persons (180 industries are specified in Schedule 1 of the Act) Every industry employing 10 or more persons which the Central Govt. may notify Any other establishment notified by the Central Government even if employing less than 10 persons Every employee employed directly / through a contractor who is in receipt of wages are eligible to become a member of the fund. Irrespective of permanent / probationary employees, all employees are eligible for joining the PF scheme from the date of joining the service Other industries maximum 12% of the basic pay A member can contribute voluntarily more than statutorily prescribed rate (upto 100% of basic salary) which will be transferred to his PF A/c

It

is payable by employer to the provident fund will be 10 % of the basic wages. Govt. may raise contribution from 10% to 12%.

RATE OF INTEREST Rate of interest on PF has been reduced to 9.50% from 12% and is likely to be reduced further.

The

member can nominate other person / persons to receive the Fund amount in the event of his death The nomination details provided by the members are maintained at the Regional Provident Fund Office for use in the event of death of the member

Repayment of loan Hospitalization for more than a month / major surgical operation / suffering from TB, Leprosy, Paralysis, Cancer, Heart ailment etc Marriage of self / son / daughter / sister / brother Education of son / daughter Physically handicapped member for purchasing an equipment to minimize the hardship due to handicap

Calculation 12% contribution by the employee is directly transferred to his Provident Fund A/c 12% is contributed by the employer out of which 8.33% is credited to Employee Pension Fund and the balance 3.67% is transferred to PF A/c of the employee 1.10% Administration charges on total wages are payable by the employer 0.50% EDLI calculated on total EDLI slab (Rs. 6500) wages and payable by the employer towards EDLI fund 0.01% EDLI Administration charges calculated on total EDLI slab wages are payable by the employer

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o

PF amount of the deceased member is payable to Nominees / legal heirs

Employees can take advances / withdraw the PF in case of retirement, medical care, housing, family obligation, education of children & financing of life Insurance Policeso

Upto 90% of the PF amount can be withdrawn at the age of 54 years or before one year of actual retiremento

Equal contribution by the employer present interest rate @ 8.5%o

PF A/c can be transferred if any member changes from one establishment to other where the PF Scheme is applicableo

Employees pension

scheme aimed at providing for economic sustence during old age and survivorship coverage to the member and his family.

give long term protection / financial security to employee upon retirement and his family in case of his pre-mature death, family pension scheme has come into force by diverting 8.33% contribution made by employer towards PF scheme To

APPLICATION

Scheme is compulsory for all the existing members who become members of the Employees Provident Fund Scheme Monthly pension to employees on retirement Widows on death of the member Children of the member below 25 years age Monthly pension to members upon permanent total disablement during service

Eligible

.05%

of the employees wages. Government contributes .25% of the employees wages bill.

Purpose : To provide life insurance benefits to the employees of the establishments covered by the EPF & MP Act, 1952

Application EDLI scheme is compulsory for all the existing members who become members of the PF Scheme Life insurance benefit (death coverage) of the employee is available under this scheme while in service Calculation EDLI is calculated on EDLI slab Rs. 6500/ 0.50% EDLI calculated on total EDLI slab (Rs. 6500) wages and transferred to EDLI fund 0.01% EDLI Administration charges calculated on total EDLI wages EDLI / administration charges are payable by the employer

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Eligible Person who is eligible to receive PF dues of deceased member who died while in service is only eligible to receive EDLI fund Exemption Employer can seek exemption from the Scheme if similar / better benefits are provided other than the Scheme with the consent of majority of employees

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