Hi all,
Recently, I received my PF slip and found that only 3.67% of the basic amount was contributed by the employer towards my account. When I asked my colleagues, they mentioned that the remaining 8.33% will be deposited in the EPF (pension fund) and this will not be reflected in the PF slips.
Could someone please clarify for me: What is the difference between PF and EPF? How can we check our EPF balance? Under what criteria can we withdraw this money?
Thanks in advance!
From India, Bangalore
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Recently, I received my PF slip and found that only 3.67% of the basic amount was contributed by the employer towards my account. When I asked my colleagues, they mentioned that the remaining 8.33% will be deposited in the EPF (pension fund) and this will not be reflected in the PF slips.
Could someone please clarify for me: What is the difference between PF and EPF? How can we check our EPF balance? Under what criteria can we withdraw this money?
Thanks in advance!
From India, Bangalore
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PF and EPF are terms used to denote the same - Employees Provident Fund. Employees Provident Fund has three schemes, namely, Provident Fund, Pension Fund, and Employees' Deposit Linked Insurance. Towards the Provident Fund, the employees' share of 12% (as well as any voluntary contributions) and 3.67% of the employer's contribution are credited. The remaining portion of 8.33% of the employer's share of contribution is credited to the Pension Fund. Since the Pension Fund is managed separately with a contribution by the Central Govt to it, the balance is not reflected in the contribution card issued to the members. The Contribution statement, therefore, contains only the status of the Provident Fund, which includes the employees' share, 3.67% of the employer's share, and interest for the year.
The Provident Fund can be withdrawn when an employee leaves the organization or upon reaching the age of 58. The Pension Fund can be withdrawn subject to conditions if the employee has not completed 10 years of service. If the employee has completed more than 10 years (or at least 9 years and 6 months), they cannot withdraw this fund but will be eligible to receive a pension upon reaching the age of 58. Reduced pension is also available after the age of 50.
Regards,
Madhu.T.K
From India, Kannur
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4479The Provident Fund can be withdrawn when an employee leaves the organization or upon reaching the age of 58. The Pension Fund can be withdrawn subject to conditions if the employee has not completed 10 years of service. If the employee has completed more than 10 years (or at least 9 years and 6 months), they cannot withdraw this fund but will be eligible to receive a pension upon reaching the age of 58. Reduced pension is also available after the age of 50.
Regards,
Madhu.T.K
From India, Kannur
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Employee's share of 12% and Employer's share of 3.67% are deposited in EPF (Provident Fund). The Employer's share of 8.33% is deposited in EPS (Pension Fund). The PF Account Slip does not include the EPS Fund amount.
Hope this resolves your query.
From India, Thana
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Hope this resolves your query.
From India, Thana
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(Fact Checked)-The user reply is [B]correct[/B]. (1 Acknowledge point)
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Dear Singaporean,
As indicated by Mr. Madhu, EPF/PF contributions are only reflected in Form 23 and are maintained by the respective PF offices in the member's account individually. You can simulate this to a savings bank account held in a financial institution.
However, unlike the EPF/PF, the pension contribution of 8.33% is maintained as a corpus fund and is not held against the member's account. You can simulate this to income tax remittance to the Government of India. You do not get any returns from IT (only refunds if any), but in the case of the Pension fund, the member gets a Pension on attaining superannuation if the member is alive, or if the member is deceased, his nominee receives the benefit.
The employee can choose to withdraw the amount contributed by him to the Pension fund (Corpus) by submitting Form 10C when he joins a new establishment that does not have PF coverage. However, if the employee has completed 10 years of service, then he does not have the option of withdrawing the amount from the Pension fund. The PF office issues a Scheme certificate that contains relevant particulars relating to the period of service. This certificate can be presented by the member in the event he joins an establishment subsequently that extends PF coverage or if he continues to serve in an establishment that does not extend PF coverage, then he has the option to surrender the scheme certificate to the PF office and opt for Pension once he attains superannuation (58 Years). He may also choose to receive a Pension after attaining 50 years, but the Pension amount will be proportionately reduced.
The Pension calculation is based on the last drawn service/70 X Number of years of completed service. If the employee holds a scheme certificate, then the service indicated in the scheme certificate is added to the service rendered by the employee in the subsequent establishment (where he was covered under PF), and then the pension amount is calculated.
Upon settlement of the Pension account, the member is given the option to choose the return of capital (a lump sum amount is paid), and the remaining amount is paid as a pension to the employee. If he does not exercise the option, then the pension amount due to him is calculated and paid.
For employees who were members of PF before 15th November 1996, the pension is calculated in two parts: one before 15th November 1996 and the other after this date as per the calculation mentioned above. This is because the Pension rules were amended on that date.
I trust the matter is clear.
M.V.KANNAN
From India, Madras
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As indicated by Mr. Madhu, EPF/PF contributions are only reflected in Form 23 and are maintained by the respective PF offices in the member's account individually. You can simulate this to a savings bank account held in a financial institution.
However, unlike the EPF/PF, the pension contribution of 8.33% is maintained as a corpus fund and is not held against the member's account. You can simulate this to income tax remittance to the Government of India. You do not get any returns from IT (only refunds if any), but in the case of the Pension fund, the member gets a Pension on attaining superannuation if the member is alive, or if the member is deceased, his nominee receives the benefit.
The employee can choose to withdraw the amount contributed by him to the Pension fund (Corpus) by submitting Form 10C when he joins a new establishment that does not have PF coverage. However, if the employee has completed 10 years of service, then he does not have the option of withdrawing the amount from the Pension fund. The PF office issues a Scheme certificate that contains relevant particulars relating to the period of service. This certificate can be presented by the member in the event he joins an establishment subsequently that extends PF coverage or if he continues to serve in an establishment that does not extend PF coverage, then he has the option to surrender the scheme certificate to the PF office and opt for Pension once he attains superannuation (58 Years). He may also choose to receive a Pension after attaining 50 years, but the Pension amount will be proportionately reduced.
The Pension calculation is based on the last drawn service/70 X Number of years of completed service. If the employee holds a scheme certificate, then the service indicated in the scheme certificate is added to the service rendered by the employee in the subsequent establishment (where he was covered under PF), and then the pension amount is calculated.
Upon settlement of the Pension account, the member is given the option to choose the return of capital (a lump sum amount is paid), and the remaining amount is paid as a pension to the employee. If he does not exercise the option, then the pension amount due to him is calculated and paid.
For employees who were members of PF before 15th November 1996, the pension is calculated in two parts: one before 15th November 1996 and the other after this date as per the calculation mentioned above. This is because the Pension rules were amended on that date.
I trust the matter is clear.
M.V.KANNAN
From India, Madras
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(Fact Checked)-The information provided in the user reply is accurate and comprehensive regarding EPF and PF contributions and withdrawals. Well done! (1 Acknowledge point)
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Dear mr kannan, you have given a very good explanation about epf and eps. There is one small correction with respect to date which is 15-11-1995 and not 15-11-96. Thank you
From India, Coimbatore
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From India, Coimbatore
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The position as stated above is correct but in my view, the option for Return of Capital has been withdrawn . AK Chandok RPFC (Retd.) www.akchandok.com 09988021715
From India, Chandigarh
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From India, Chandigarh
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Dear S.Ganapathy & Mr.A.K.Chandok, Thank you for the correction. In fact I was of the opinion the option of return of capital is still in vogue. M.V.KANNAN
From India, Madras
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From India, Madras
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Yes, there are three major amendments took placed in the EPS,1995 the detais there of are as under-
The government of India had issued a Gazette notification (GSR Nos. 688 (E) dated September 26, 2008) incorporating several amendments they are:
1. Amendment to Para 12 (7).
2. Deletion of Para 12 A.
3. Deletion of Para 13.
These amendments have far reaching consequences by way of substantially altering the benefit package of the EPS ’95 to the detriment of the interests of workers.
The first amendment to Para 12 (7) has increased the rate by which the amount of pension is to be reduced in the case of early pension (availed by those who have completed 50 years of age but are below the age of 58) from 3 per cent to 4 per cent. This will result in immediate reduction in the quantum of pension.
If, for example, the eligible pension on completing 58 years of age is Rs 1000 per month and the employee has to exit the job on completion of 50 years of age, either due to resignation, retrenchment, illness or otherwise, he would get an early pension applying a reduction of 3 per cent per year i.e. 24 per cent reduced from the monthly pension and would get Rs 760 per month. This reduction rate has now been enhanced to 4 per cent and in this case the reduction would be 32 per cent or the monthly pension would be Rs 680 only.
The second amendment (deletion of Para 12 A) is altogether eliminating the option available at present for commutation of pension. The existing provision enables a member to commute up to a maximum of one-third of his pension so as to receive hundred times the monthly pension. This facility was made available after three years of commencement of the Pension Scheme i.e. from November 16, 1998 onwards.
If, for example, the eligible pension is Rs 1000 per month and the pensioner opts to commute one-third of his monthly pension the commuted value will be equal to 1/3 x 1000 x 100 = Rs 33,333 and the same will be paid at the time of exercise of option for commutation. The balance pension payable on monthly basis will be Rs 667.
This option for commutation stands totally abolished now with this amendment. The pensioner is thus denied the opportunity to commute one-third of his monthly pension and avail a lump sum amount to meet exigencies like marriage in the family, death of kin, medical expenses etc. The concept of commutation is a universal component of any pension scheme and this has been done away with arbitrarily.
The third amendment (deletion of Para 13) eliminates the existing option available to a member eligible for pension to draw reduced pension and avail a return of capital under any of the three alternatives provided. Unlike the option for commutation, the option for return of capital must be exercised at the time of applying for pension itself.
The three alternatives available were:
i. A pensioner during his lifetime can opt to avail a revised pension of 90 per cent of original pension with return of capital equal to 100 times the original monthly pension payable to the nominee on death of the member.
ii. A pensioner during his lifetime can opt to avail a revised pension of 90 per cent of original monthly pension; the widow of the pensioner can opt to avail a revised pension of 80 per cent of original monthly pension on the death of her husband; the nominee of the pensioner can also exercise this option on the remarriage of the widow; In these case the return of capital will be equal to 90 times the original monthly pension.
iii. A pensioner can opt to avail a fixed pension for a period of 20 years notwithstanding whether the member lives for that period or not. Under this option the member can avail a 87.5 per cent of original monthly pension for 20 years and at the end of 20 years, avail return of capital equal to 100 times the original monthly pension.
All these three alternative options for availing return of capital have now been totally eliminated with these amendments.
pkjain
From India, Delhi
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The government of India had issued a Gazette notification (GSR Nos. 688 (E) dated September 26, 2008) incorporating several amendments they are:
1. Amendment to Para 12 (7).
2. Deletion of Para 12 A.
3. Deletion of Para 13.
These amendments have far reaching consequences by way of substantially altering the benefit package of the EPS ’95 to the detriment of the interests of workers.
The first amendment to Para 12 (7) has increased the rate by which the amount of pension is to be reduced in the case of early pension (availed by those who have completed 50 years of age but are below the age of 58) from 3 per cent to 4 per cent. This will result in immediate reduction in the quantum of pension.
If, for example, the eligible pension on completing 58 years of age is Rs 1000 per month and the employee has to exit the job on completion of 50 years of age, either due to resignation, retrenchment, illness or otherwise, he would get an early pension applying a reduction of 3 per cent per year i.e. 24 per cent reduced from the monthly pension and would get Rs 760 per month. This reduction rate has now been enhanced to 4 per cent and in this case the reduction would be 32 per cent or the monthly pension would be Rs 680 only.
The second amendment (deletion of Para 12 A) is altogether eliminating the option available at present for commutation of pension. The existing provision enables a member to commute up to a maximum of one-third of his pension so as to receive hundred times the monthly pension. This facility was made available after three years of commencement of the Pension Scheme i.e. from November 16, 1998 onwards.
If, for example, the eligible pension is Rs 1000 per month and the pensioner opts to commute one-third of his monthly pension the commuted value will be equal to 1/3 x 1000 x 100 = Rs 33,333 and the same will be paid at the time of exercise of option for commutation. The balance pension payable on monthly basis will be Rs 667.
This option for commutation stands totally abolished now with this amendment. The pensioner is thus denied the opportunity to commute one-third of his monthly pension and avail a lump sum amount to meet exigencies like marriage in the family, death of kin, medical expenses etc. The concept of commutation is a universal component of any pension scheme and this has been done away with arbitrarily.
The third amendment (deletion of Para 13) eliminates the existing option available to a member eligible for pension to draw reduced pension and avail a return of capital under any of the three alternatives provided. Unlike the option for commutation, the option for return of capital must be exercised at the time of applying for pension itself.
The three alternatives available were:
i. A pensioner during his lifetime can opt to avail a revised pension of 90 per cent of original pension with return of capital equal to 100 times the original monthly pension payable to the nominee on death of the member.
ii. A pensioner during his lifetime can opt to avail a revised pension of 90 per cent of original monthly pension; the widow of the pensioner can opt to avail a revised pension of 80 per cent of original monthly pension on the death of her husband; the nominee of the pensioner can also exercise this option on the remarriage of the widow; In these case the return of capital will be equal to 90 times the original monthly pension.
iii. A pensioner can opt to avail a fixed pension for a period of 20 years notwithstanding whether the member lives for that period or not. Under this option the member can avail a 87.5 per cent of original monthly pension for 20 years and at the end of 20 years, avail return of capital equal to 100 times the original monthly pension.
All these three alternative options for availing return of capital have now been totally eliminated with these amendments.
pkjain
From India, Delhi
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Hi All,
I know I am reviving a really old thread here and hope I can still get a response. If, as mentioned by Manasi, the below is true: "Employee share of 12% and Employer Share of 3.67% is deposited in EPF (Provident Fund). Employer Share of 8.33% is deposited in EPS (Pension Fund). PF Account Slip does not include EPS Fund amount." Then what proof do we hold that the organization has actually been depositing 8.33% of the overall 12% into the EPS (Employee Pension Fund)? Is there some sort of documentation that we should request from the organization in order to understand whether this is being done?
Regards,
Mithran
From United States
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I know I am reviving a really old thread here and hope I can still get a response. If, as mentioned by Manasi, the below is true: "Employee share of 12% and Employer Share of 3.67% is deposited in EPF (Provident Fund). Employer Share of 8.33% is deposited in EPS (Pension Fund). PF Account Slip does not include EPS Fund amount." Then what proof do we hold that the organization has actually been depositing 8.33% of the overall 12% into the EPS (Employee Pension Fund)? Is there some sort of documentation that we should request from the organization in order to understand whether this is being done?
Regards,
Mithran
From United States
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Dear Mithran Now, if you have UAN (Universal Account Number) you can create your account and login - UAN portal of EPFO site, which also show the EPS contribution as well as EPF contribution. PK
From India, Delhi
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From India, Delhi
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(Fact Checked)-The information provided in the user reply is correct. It is advisable for individuals to access the UAN portal of EPFO to check their EPF and EPS contributions. (1 Acknowledge point)
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(Fact Checked)-The user's reply is [B]correct[/B] and provides accurate information regarding the difference between PF and EPF, contribution details, withdrawal criteria, and other relevant aspects related to the Provident Fund and Pension Fund schemes. (1 Acknowledge point)