Hello, Is PF a non-mandatory thing? Can some companies opt not to pay PF? Is there some other alternative to PF? — — - sree
From India, New Delhi
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9From India, New Delhi
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Hello Preet,
What I know about PF, I would like to share with you.
1. It is non-mandatory for companies with up to 19 employees. When a company hires the 20th employee, it becomes mandatory as per government rules.
2. If employees do not wish to participate, it is their prerogative. In that case, the employer should obtain consent from the employees, and records must be maintained as proof.
3. The PF contribution typically consists of 12% from the employee's share and 12% from the employer's share. However, in IT sectors where CTC is considered, the entire 24% is borne by the employee.
4. Once an employee is enrolled in PF, they cannot stop the contribution midway unless they leave the job.
As per my knowledge,
Cordially,
Preet
From India, Bangalore
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What I know about PF, I would like to share with you.
1. It is non-mandatory for companies with up to 19 employees. When a company hires the 20th employee, it becomes mandatory as per government rules.
2. If employees do not wish to participate, it is their prerogative. In that case, the employer should obtain consent from the employees, and records must be maintained as proof.
3. The PF contribution typically consists of 12% from the employee's share and 12% from the employer's share. However, in IT sectors where CTC is considered, the entire 24% is borne by the employee.
4. Once an employee is enrolled in PF, they cannot stop the contribution midway unless they leave the job.
As per my knowledge,
Cordially,
Preet
From India, Bangalore
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Very good topic, would appreciate if somebody could shed some light on this, for the benefit of all of us.
These days, employees do not like to opt for it as it reduces their take-home pay, and there are administration issues encountered in PF, ranging from withdrawal to transfer.
Best Regards,
Anudeep
From India, Hyderabad
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These days, employees do not like to opt for it as it reduces their take-home pay, and there are administration issues encountered in PF, ranging from withdrawal to transfer.
Best Regards,
Anudeep
From India, Hyderabad
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Hi all,
I would like to suggest www.lexsite.com for legal queries. You can register for free and view online the related laws of India.
Mariya
From India, Madras
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I would like to suggest www.lexsite.com for legal queries. You can register for free and view online the related laws of India.
Mariya
From India, Madras
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Hi everybody,
Preet is absolutely right. PF is applicable in any organization with 20 or more persons employed. PF is deducted at 12% of basic pay of an employee and the same proportion is deposited by the respective employer as well. So, an employee is forcefully saving 24% of his/her basic per month.
Regarding withdrawal of PF, you have to withdraw the forms from any PF office, fill them out, and send them to the respective employers. The employee and employers' contribution columns will be left blank. These will be filled out by the employers, signed by their authorized signatory, and deposited to the respective PF office. In the forms, there is a column asking for the mode of payment. It would be preferable if you choose the option of transferring your PF amount directly to your bank account. The transaction is safe and fast.
From India, Calcutta
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Preet is absolutely right. PF is applicable in any organization with 20 or more persons employed. PF is deducted at 12% of basic pay of an employee and the same proportion is deposited by the respective employer as well. So, an employee is forcefully saving 24% of his/her basic per month.
Regarding withdrawal of PF, you have to withdraw the forms from any PF office, fill them out, and send them to the respective employers. The employee and employers' contribution columns will be left blank. These will be filled out by the employers, signed by their authorized signatory, and deposited to the respective PF office. In the forms, there is a column asking for the mode of payment. It would be preferable if you choose the option of transferring your PF amount directly to your bank account. The transaction is safe and fast.
From India, Calcutta
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Hi,
As observed, there are many companies, including big brands, especially in IT, that do not provide PF to their employees. Everything else is included in the salary breakup. How can a company claim exemption from PF? Also, when we refer to CTC, is PF deducted from that amount only, as it falls under the preview of Cost to the company.
Best Regards,
Anudeep
From India, Hyderabad
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As observed, there are many companies, including big brands, especially in IT, that do not provide PF to their employees. Everything else is included in the salary breakup. How can a company claim exemption from PF? Also, when we refer to CTC, is PF deducted from that amount only, as it falls under the preview of Cost to the company.
Best Regards,
Anudeep
From India, Hyderabad
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Companies that have a scheme better than the PF can apply for exemption. Also employees paid more than Rs.6500 per month can also be exempted.
From India, Madras
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From India, Madras
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I would appreciate if any body could throw light on whether a person should go for PF or not. Regards, Ratii Gupta
From India, Pune
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From India, Pune
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Hi Ratii,
I see you have just joined and have become active as well!! A grand welcome to you and hope this forum proves to be a learning one as it has been for all of us.
Would like to thank Mariya, Atrita, Anudeep, Preet for adding points to this thread of discussion.
This question was also posed by the potential employee, and here is how I justified the same:-
1. Applicability of PF:
APPLICABILITY OF EMPLOYEES' PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT '1952
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to the whole India except Jammu & Kashmir.
Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to:
Every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by the Central Government in the Official Gazette. (List of Industries/Establishments)
Employing 20 or more persons.
Cinema Theatres employing 5 or more persons.
2. The Act does not apply to:
The cooperative societies employing less than 50 persons and working without the aid of power. 16(1)(a)
The establishment to which this Act applies shall continue to be governed by this Act, even if the number of employees falls below 20 at a later date. [1(5)].
So whether one likes it or not, we are all bound by it, and by default, if the company has more than 20 employees, then PF is applicable.
2. Forced savings - someone had mentioned this. Yes, one gets 24% of the Basic & DA credited to one PF account, which otherwise would get spent by the employee if it were to fall into his hands.
3. Tax savings: - The employee's contribution adds to the tax shield of One lac limit under section 80 CC. Here it provides 30-40% on the average to the limit to save hard money being taxed.
4. Rate of interests: One gets interest of 8.5% on the above amount, and every year one gets the PF slip entailing the details & balance.
Keeping the above factors in mind, it is advisable for one to opt for PF contribution.
Yes, if one quits the job and after three months, he/she has the option of withdrawing the PF contribution to their respective bank accounts.
Cheers,
Rajat
From India, Pune
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I see you have just joined and have become active as well!! A grand welcome to you and hope this forum proves to be a learning one as it has been for all of us.
Would like to thank Mariya, Atrita, Anudeep, Preet for adding points to this thread of discussion.
This question was also posed by the potential employee, and here is how I justified the same:-
1. Applicability of PF:
APPLICABILITY OF EMPLOYEES' PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT '1952
The Employees' Provident Fund and Miscellaneous Provisions Act 1952 applies to the whole India except Jammu & Kashmir.
Employees' Provident Fund and Miscellaneous Provisions Act 1952 is applicable to:
Every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by the Central Government in the Official Gazette. (List of Industries/Establishments)
Employing 20 or more persons.
Cinema Theatres employing 5 or more persons.
2. The Act does not apply to:
The cooperative societies employing less than 50 persons and working without the aid of power. 16(1)(a)
The establishment to which this Act applies shall continue to be governed by this Act, even if the number of employees falls below 20 at a later date. [1(5)].
So whether one likes it or not, we are all bound by it, and by default, if the company has more than 20 employees, then PF is applicable.
2. Forced savings - someone had mentioned this. Yes, one gets 24% of the Basic & DA credited to one PF account, which otherwise would get spent by the employee if it were to fall into his hands.
3. Tax savings: - The employee's contribution adds to the tax shield of One lac limit under section 80 CC. Here it provides 30-40% on the average to the limit to save hard money being taxed.
4. Rate of interests: One gets interest of 8.5% on the above amount, and every year one gets the PF slip entailing the details & balance.
Keeping the above factors in mind, it is advisable for one to opt for PF contribution.
Yes, if one quits the job and after three months, he/she has the option of withdrawing the PF contribution to their respective bank accounts.
Cheers,
Rajat
From India, Pune
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Hi,
I fully agree with Rajat Sir. In our organization, we too faced the same issue, but we convinced employees. The basic intention of all labor laws is to benefit the employees and create long-term social security. However, individuals in BPOs who frequently change jobs do not perceive it positively. They are not inclined to stay with a particular company for an extended period. We have to persuade them that these laws are for their benefit. Alternatively, we could establish a structure where the Basic + DA exceeds 7500, exempting us from this requirement, and we can seek voluntary consent from employees to not implement it. Nevertheless, it is preferable to comply with the law and enforce the regulations.
Thanks,
Samir
From India, Surat
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I fully agree with Rajat Sir. In our organization, we too faced the same issue, but we convinced employees. The basic intention of all labor laws is to benefit the employees and create long-term social security. However, individuals in BPOs who frequently change jobs do not perceive it positively. They are not inclined to stay with a particular company for an extended period. We have to persuade them that these laws are for their benefit. Alternatively, we could establish a structure where the Basic + DA exceeds 7500, exempting us from this requirement, and we can seek voluntary consent from employees to not implement it. Nevertheless, it is preferable to comply with the law and enforce the regulations.
Thanks,
Samir
From India, Surat
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The limit for optional PF is 6500 and not 7500... Where as that ceiling (7500) is for ESIC... Regards, Nilesh
From India, Pune
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From India, Pune
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Hi, the discussions and points raised are really helpful. However, someone mentioned that in IT companies, there is no PF system. I am not aware of any such universal norm in the IT sector. Maybe some companies are not providing this facility to their staff. Can anyone please explain what the actual fact is?
From India, Calcutta
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From India, Calcutta
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Hi all,
Now you tell, is there a central government contribution? If yes, how much percentage? If the employer is not interested in your withdrawal, how will you withdraw? What is the difference between PF and PPF?
Regards,
Sidheshwar
From India, Bangalore
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Now you tell, is there a central government contribution? If yes, how much percentage? If the employer is not interested in your withdrawal, how will you withdraw? What is the difference between PF and PPF?
Regards,
Sidheshwar
From India, Bangalore
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Hi Sidheshwar,
Now, you tell, is there central govt contribution? If yes, how much percentage? If the employer is not interested in your withdrawal, how will you withdraw? What is the difference between PF and PPF?
The central Government's liability comes in two parts:-
* The Central Government shall also contribute at the rate of 1.16 per cent of the pay of the members of the Employees' Pension Scheme and credit the contribution to the Employees' Pension Fund:
* Monthly Member's Pension.
(1) A member shall be entitled to:
(a) superannuation pension if he has rendered eligible service of 20 years or
(b) more and retires on attaining the age of 58 years;
(c) retirement pension if he has rendered eligible service of 20 years or more and retires or otherwise ceases to be in employment before attaining the age of 58 years;
(d) short service pension if he has rendered eligible service of 10 years or more but less than 20 years.
(2) In the case of a new entrant, the amount of monthly superannuation pension or retiring pension, as the case may be, shall be computed in accordance with the following factors, namely: -
Monthly member's pension = Pensionable salary X Pensionable service / 70
Benefits to the family on the death of a member
(1) Pension to the family shall be admissible from the date following the date of death of the member if the member dies:
(a) while in service, provided that at least one month's contribution has been paid into the Employees' Pension Fund, or
(b) after the date of exit but before attaining the age of 58, from the employment having rendered service entitling him/her to monthly member's pension but before the commencement of pension payment or
(c) after the commencement of payment of the monthly member's pension.
Note: The cases where a member has rendered less than 10 years of eligible service on the date of exit but has retained the membership of the Pension Fund and dies before attaining the age of 58 years shall be regulated under sub-paragraph (8) of paragraph 12.
(2) (a) The monthly widow pension shall be:
(i) in the cases covered by clause (a) of sub-paragraph (1), equal to the monthly member's pension which would have been admissible as if the member had retired on the date of death or Rs 450/- or the amount indicated in Table 'C' whichever is more.
Cheers,
Rajat
From India, Pune
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Now, you tell, is there central govt contribution? If yes, how much percentage? If the employer is not interested in your withdrawal, how will you withdraw? What is the difference between PF and PPF?
The central Government's liability comes in two parts:-
* The Central Government shall also contribute at the rate of 1.16 per cent of the pay of the members of the Employees' Pension Scheme and credit the contribution to the Employees' Pension Fund:
* Monthly Member's Pension.
(1) A member shall be entitled to:
(a) superannuation pension if he has rendered eligible service of 20 years or
(b) more and retires on attaining the age of 58 years;
(c) retirement pension if he has rendered eligible service of 20 years or more and retires or otherwise ceases to be in employment before attaining the age of 58 years;
(d) short service pension if he has rendered eligible service of 10 years or more but less than 20 years.
(2) In the case of a new entrant, the amount of monthly superannuation pension or retiring pension, as the case may be, shall be computed in accordance with the following factors, namely: -
Monthly member's pension = Pensionable salary X Pensionable service / 70
Benefits to the family on the death of a member
(1) Pension to the family shall be admissible from the date following the date of death of the member if the member dies:
(a) while in service, provided that at least one month's contribution has been paid into the Employees' Pension Fund, or
(b) after the date of exit but before attaining the age of 58, from the employment having rendered service entitling him/her to monthly member's pension but before the commencement of pension payment or
(c) after the commencement of payment of the monthly member's pension.
Note: The cases where a member has rendered less than 10 years of eligible service on the date of exit but has retained the membership of the Pension Fund and dies before attaining the age of 58 years shall be regulated under sub-paragraph (8) of paragraph 12.
(2) (a) The monthly widow pension shall be:
(i) in the cases covered by clause (a) of sub-paragraph (1), equal to the monthly member's pension which would have been admissible as if the member had retired on the date of death or Rs 450/- or the amount indicated in Table 'C' whichever is more.
Cheers,
Rajat
From India, Pune
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Hi Rajat,
How will we withdraw PF if the employer is not processing the withdrawal form after its submission? How can we trace the PF contributions of contractors' employees who deposit PF challans common for all clients?
Regards,
Sidheshwar
From India, Bangalore
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How will we withdraw PF if the employer is not processing the withdrawal form after its submission? How can we trace the PF contributions of contractors' employees who deposit PF challans common for all clients?
Regards,
Sidheshwar
From India, Bangalore
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Hi, I am Rahul.
I can help you regarding PF.
1. It's mandatory if in a unit 20 or more employees are working.
2. The ceiling limit for PF is ₹6,500, i.e., if the basic salary of the employee is less than ₹6,500, then he is covered under the PF Act. If his basic is more than ₹6,500, he is exempted from PF.
From India, Madras
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I can help you regarding PF.
1. It's mandatory if in a unit 20 or more employees are working.
2. The ceiling limit for PF is ₹6,500, i.e., if the basic salary of the employee is less than ₹6,500, then he is covered under the PF Act. If his basic is more than ₹6,500, he is exempted from PF.
From India, Madras
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Hi, Would just like to get confirmation that if the basic salary is above 6500, the person is exempted from PF? Is it so? How do we go about it, how to claim the exemption? Best Regards' Anu
From India, Hyderabad
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From India, Hyderabad
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Hi Anu,
If Basic+DA is less than Rs 6500/-, it is compulsory for the organization to comply. However, if it is more, there is no compulsion for the employer. But, one thing to note is that if an employee is already a member of the fund and their basic+DA increases from Rs 6500/-, the employer is compelled to comply, but the employer's contribution will be calculated based on Rs 6500/- only. The employer is not bound in this regard. If there is still any confusion, please write.
Regards,
Sidheshwar
From India, Bangalore
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If Basic+DA is less than Rs 6500/-, it is compulsory for the organization to comply. However, if it is more, there is no compulsion for the employer. But, one thing to note is that if an employee is already a member of the fund and their basic+DA increases from Rs 6500/-, the employer is compelled to comply, but the employer's contribution will be calculated based on Rs 6500/- only. The employer is not bound in this regard. If there is still any confusion, please write.
Regards,
Sidheshwar
From India, Bangalore
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Hi Sidhu,
"How will we withdraw PF if the employer is not processing the withdrawal form after its submission?"
Well, most companies do not process withdrawals unless they have genuine reasons, such as if a person has embezzled or if the company has filed a case against the employee. Other than that, they have no right to withhold.
I suggest keeping a copy of the correspondence for PF submission and, after two or three reminders, filing a complaint with PF authorities. You would be surprised how prompt they are in responding to grievances, or at least they would guide you on this vexed issue.
"How will we trace the PF contributions of a contractor's employees who are depositing PF challan common for all clients?"
This is a good point. I will check and revert.
Have a great day! 😊
Cheers,
Rajat
From India, Pune
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"How will we withdraw PF if the employer is not processing the withdrawal form after its submission?"
Well, most companies do not process withdrawals unless they have genuine reasons, such as if a person has embezzled or if the company has filed a case against the employee. Other than that, they have no right to withhold.
I suggest keeping a copy of the correspondence for PF submission and, after two or three reminders, filing a complaint with PF authorities. You would be surprised how prompt they are in responding to grievances, or at least they would guide you on this vexed issue.
"How will we trace the PF contributions of a contractor's employees who are depositing PF challan common for all clients?"
This is a good point. I will check and revert.
Have a great day! 😊
Cheers,
Rajat
From India, Pune
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Hi Rajat,
Good morning.
Up to 2002, I was working with Coca-Cola, Bhopal as a labor officer, but I was through an agency. I was handling contract labor. When I left the job and approached the agency proprietor for withdrawal, every time he said he would process the withdrawal. But he didn't do anything because I had left the job against his willingness and Coke management. Not a single authority had responded.
Then I contacted one consultant who was providing services to Coke. I explained my problem, and he asked for a completed withdrawal form. I sent the form, and he processed it. Finally, I received my payment. Now, you tell me, how did he do it?
Sidhu
From India, Bangalore
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Good morning.
Up to 2002, I was working with Coca-Cola, Bhopal as a labor officer, but I was through an agency. I was handling contract labor. When I left the job and approached the agency proprietor for withdrawal, every time he said he would process the withdrawal. But he didn't do anything because I had left the job against his willingness and Coke management. Not a single authority had responded.
Then I contacted one consultant who was providing services to Coke. I explained my problem, and he asked for a completed withdrawal form. I sent the form, and he processed it. Finally, I received my payment. Now, you tell me, how did he do it?
Sidhu
From India, Bangalore
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Hi Siddheshwar,
I want to answer your query regarding PF.
If the basic salary of an employee is more than 6500, he automatically falls outside the ambit or scope of the P.F. Act; hence, that employee is exempted. You don't have to inform anybody at that stage, but while submitting the annual returns 3 and 6A, then you have to furnish the details, and that is non-mandatory. However, it is up to the PF department if they feel they can call for the inspection of necessary records.
Rahul Gupta, Wave Cinemas - Lucknow
From India, Madras
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I want to answer your query regarding PF.
If the basic salary of an employee is more than 6500, he automatically falls outside the ambit or scope of the P.F. Act; hence, that employee is exempted. You don't have to inform anybody at that stage, but while submitting the annual returns 3 and 6A, then you have to furnish the details, and that is non-mandatory. However, it is up to the PF department if they feel they can call for the inspection of necessary records.
Rahul Gupta, Wave Cinemas - Lucknow
From India, Madras
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Hi Rahul,
It's nice talking to you.
I have a small query. In the case of an employee who is already a member of PF and their salary increases beyond 6500/-, is it mandatory for the employer to contribute on the entire amount or just on the capped amount of 6500/-? Please reply with comments.
Regards,
Sidheshwar
From India, Bangalore
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It's nice talking to you.
I have a small query. In the case of an employee who is already a member of PF and their salary increases beyond 6500/-, is it mandatory for the employer to contribute on the entire amount or just on the capped amount of 6500/-? Please reply with comments.
Regards,
Sidheshwar
From India, Bangalore
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hi.Sidheshwar, NO IT IS NOT COMPULOSRY FOR EMPLOYER TO CONTRIBUTE TO PF IF EMPLOYEES SALARY IS MORE THAN 6500.OO REGARDS, RAHUL WAVE CINEMAS-LUCKNOW
From India, Madras
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From India, Madras
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HI SIDHESHWAR.......... NO ,IT IS NOT COMPULSORY FOR EMPLOYER TO CONTRIBUTE FOR PF IF BASIC SALARY OF EMPLOYEE IS MORE THAN 6500 REGARDS, RAHUL GUPTA, WAVE CINEMAS-LUCKNOW
From India, Madras
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From India, Madras
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Contact your local PF Enforcement officer in the District Headquarters or the Regional Commissioner in the State Capital. Write a letter along with withdrawal forms (3 Nos.) and send it via registered post to EPFO Zonal Headquarters (addresses can be traced online). If possible, obtain a copy of the receipt from the Local Officer.
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Hi Rahul,
It's compulsory that you contact a senior person. If the employee is already a member and shows proof, it's mandatory for the employer to contribute, but only on ₹6,500. Not on the increased salary. You may approach any PF official.
Regards,
Sidheshwar
From India, Bangalore
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It's compulsory that you contact a senior person. If the employee is already a member and shows proof, it's mandatory for the employer to contribute, but only on ₹6,500. Not on the increased salary. You may approach any PF official.
Regards,
Sidheshwar
From India, Bangalore
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Hi SIDHESHWAR.......
WHAT YOU ARE SAYING IS STILL UNCLEAR TO ME. THE ONLY MATTER OF CONCERN IS IF AN EMPLOYEE HAS A BASIC SALARY OF LESS THAN 6.5K, THEN ONLY THEY ARE COVERED UNDER THE ACT; IT DOESN'T WORK THE OTHER WAY AROUND. HERE, BASIC SALARY MEANS ONLY BASIC PAY PLUS D.A.
REGARDS, RAHUL WAVE CINEMAS - LUCKNOW
From India, Madras
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WHAT YOU ARE SAYING IS STILL UNCLEAR TO ME. THE ONLY MATTER OF CONCERN IS IF AN EMPLOYEE HAS A BASIC SALARY OF LESS THAN 6.5K, THEN ONLY THEY ARE COVERED UNDER THE ACT; IT DOESN'T WORK THE OTHER WAY AROUND. HERE, BASIC SALARY MEANS ONLY BASIC PAY PLUS D.A.
REGARDS, RAHUL WAVE CINEMAS - LUCKNOW
From India, Madras
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Hi Rahul I m doing thatwhy i m telling u. Pls find out with sr person. if person is already member of PF. Regards Sidheshwar
From India, Bangalore
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From India, Bangalore
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Hi,
Thanks, Preeti, for sharing the PF policy that is being followed in IT-based concerns. Could anyone provide more information about the HR policies in IT-based concerns? Please...
Regards,
Subasini
From India, Bharat
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Thanks, Preeti, for sharing the PF policy that is being followed in IT-based concerns. Could anyone provide more information about the HR policies in IT-based concerns? Please...
Regards,
Subasini
From India, Bharat
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Dear all,
Pls go through below mentioned details:
FREQUENTLY ASKED QUESTIONS
1) Who will be covered by the Pension Scheme?
Ans: Every member of the ceased Family Pension Scheme 1971 and anyone who joins any covered establishment on or after 16-11-95 is compulsorily to join this scheme, provided his/her salary/wage is less than Rs. 6500/- per month at the date of appointment.
2) What is a covered establishment?
ans: Covered establishment is an establishment belonging to the class of industries / other establishments, which has been listed in the schedule appended to the Employees' Provident Fund and Miscellaneous Provisions Act 1952 and where 20 or more persons are employed.
3) If employee was a Family Pension Scheme member. He/She has left on 13-12-93 and he/she is 54 years old. He/She has taken his withdrawal benefit. Can he/she join the new scheme?
Ans: Yes, by refunding withdrawal benefit together with interest. Thereafter, he/she will be entitled to receive pension from age 58, if he/she completes at least 10 years of contributory service by then.
4) If employee is a Family Pension Scheme Member and he/she has retired after 58 years of age on 15-01-94. Can he/she join the new scheme?
Ans: Yes, anyone who has retired by reaching age 58 between 01-04-93 and 15-11-95 may join the scheme by returning the withdrawal benefit along with interest. He will be paid pension with immediate effect, from date of exit provided he has rendered 10 years of contributory service.
5) If employee is not a Family Pension Scheme member and he/she is 56 years of age, Can he/she join Family Pension?
Ans: Yes, by diverting from his/her Provident Fund balance, Family Pension Scheme contribution from date of his/her joining or 01-03-71, whichever is later.
6) Whether the Family Pension Scheme member who has attended the age of 58 years before 01-04-93 and has left employment after 01-04-93 will be admitted to the scheme as member of Family Pension Scheme, 1971?
Ans: Yes, he will be deemed to have retired after 01-04-93. On repayment of that withdrawal benefit which was paid, Pension will be paid from same date, provided he has rendered 10 years of contributory service.
7) In case Family Pension member has attained the age of 58 years between 01-04-93 and 16-11-95 then in that case whether arrears of monthly Member Pension become payable for the period earlier than 16-11-95 i.e. from the date of his/her attaining the age of 58 years which is prior to 16-11-95?
Ans: No, he/she will be deemed to have retired from 16-11-95 and pension paid accordingly.
8) Is employee the only beneficiary of Fund?
Ans: Benefit will be paid to him/her and in his/her absence to his/her family.
9) What is meant by Family?
Ans: Family means employees' spouse and children below 25 years of age.
10) Suppose an employee does not have a Family and he/she dies before receiving benefit. Does his/her pension get lost?
Ans: No, if he/she does not have a family, benefits will be paid to his/her nominee, who will receive the benefit in his/her absence.
11) Suppose member has not nominated anyone.The pension / ROC will be paid to the dependent parents.
12) Can member change his/her nomination?
Ans: He/She can change his/her nomination whenever he/she decides within the framework of rules for such nomination. In other words if he/she has a family, nomination should be in favour of a member(s) of the family. If he/she has no family he/she can nominate anyone he/she wishes.
13) How many years service is required to be eligible to receive member pension?
Ans: Minimum 10 years eligible service will entitle for member pension.
14) Employee is a member of Employees' Pension Scheme. He/She has left employment at 48 yrs. of age and 8 yrs. of service. When shall he/she receive his/her pension?
Ans: He/She can take either withdrawal benefit or can take scheme certificate so that the 8 years service can be added to any future service that he / she may put in, in any other covered establishment. By virtue of being a holder of a scheme certificate, if the member dies before 58 years widow / widower and children shall be entitled for pension.
15) What is past service pension?
Ans: This pension is for the period of membership of the Employees' Family Pension Scheme, 1971.
16) When does an employee become eligible to become a member of Employees' Provident Fund Scheme, 1952 and Employees' Deposit Linked Insurance Scheme, 1976?
Ans: An employee becomes a member of Employees Provident Fund (Employees' Provident Fund) Scheme, 1952 / Employees Deposit Linked Insurance (Employees' Deposit Linked Insurance) Scheme, 1976 immediately on joining an establishment covered under the Employees Provident Funds & Miscellaneous Provision Act, 1952.
17) What is nomination?
Ans: Every member has to give the details of himself & details of the nominee for Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes and details of family for Employees Pension Scheme, 1995 in form no. 2. A member if, is having a family can nominate any one or more persons to receive the Provident Fund on his death. In case of him having no family he can nominate any other person. Family for the purpose of Employee Provident Fund Scheme'52 means wife/husband, children, whether married or unmarried, including adopted children, if adoption is recognized and dependant parents of member. Employees Deposit Linked Insurance Scheme benefit will be paid to the nominee under Employees Provident Fund Scheme, 1952. For the purpose of Employees Pension Scheme,1995 the member has to furnish the details, such as name, relationship & age of all the family members in the form no. 2. Family for the purpose of Employees Pension Scheme, 1995 means wife/husband & children. Whenever member wants to make a change in the nomination already made for Provident Fund, or to update the details of family for Employees Pension Scheme,1995, he has to send a revised form no. 2. The form no.2 is routed through the employer.
18) What are the periodical returns to be sent by an employer to the Provident Fund Office?
Ans: The employer of an un-exempted establishment has to forward the following returns. These returns will include details required under the three schemes namely, Employees Provident Fund Scheme, 1952, Employee Deposit Linked Insurance Scheme,1976 and Employee Pension Scheme, 1995.
a) Form-9(Revised):The details of employees enrolled as members of Employees' Provident FundS'52, Employees' Deposit Linked Insurance'76 & Employees' Pension Scheme'95 on coverage of the establishment- This is to be submitted immediately after coverage, within 15 days of coverage.
b) Form-12A:The details of the contributions recovered form the members & paid along with details of employers' contribution & administrative charges- This is to be submitted monthly by 25th of following month.
c) Form-5:The details of the employees enrolled newly to the Provident Fund- To be submitted along with Form-12A every month within 15 days of the following month.
d) Form-10:The details of the employees leaving service during the month- To be submitted along with form-12A.
e) Challans:The triplicate copy of challans in token of having remitted the Provident Fund dues in the bank- to be submitted along with form-12A every month.
f) Form-2(Revised):Nomination form- To be submitted along with form-5/9.
g) Form-3A:The details of wages & contributions in respect of each member, to be prepared financial year wise- To be submitted to the Provident Fund office by 30th of April every year.
h) Form-6A:Yearly consolidated statement of contributions- To be forwarded yearly along with form-3A. It should be ensured that all the form-3A are entered in form-6A, irrespective of whether the form-3A was forwarded for the broken period and the total dues as per the form-12A for the whole year agrees with the total of form-6A within 30th April.
i) Form-5A:Return of ownership of the establishment- To be forwarded immediately after coverage & whenever there is a change in the ownership, it has to be intimated with in 15 days of change.
j) Specimen signature:Specimen signature of the officer/officers who are authorized to sign the returns/documents relating to Provident Fund forwarded immediately after coverage & whenever there is a change inauthorized officer.
19) What is the procedure to be followed by the member if the employer is not attesting his claim forms?
Ans: It is the duty of the employer under the Act & Scheme to help Employees' Provident Fund organisation to settle the Provident Fund dues of his employees. He has to complete the prescribed application within 5 days of receipt [para72(5)] forms & hand over it to the member when he leaves the service. When a member finds difficult to get the form attested by the employer, he can get the attestation of any of the following officer & send to the Provident Fund office
1. Manager of a bank.
2. By any gazetted officer.
3. Member of the Central Board of Trustees./ committee/ Regional Committee (Employees'Provident Fund Organization).
4. Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public.
20) What is the mode of payment of Provident Fund and Employees' Deposit Linked Insurance dues?
Ans: Provident Fund & Employees' Deposit Linked Insurance dues is paid by money order/ by deposit in payees' bank a/c/ through employer/ by depositing the cheque in payees' name or part of amount in annuity scheme in any nationalised bank. Payment by money order is allowed where the amount is not more than Rs. 2000/-.
21) What are the modalities to be followed for payment through cheque?
Ans: The member has to open an account in the nationalised bank, scheduled bank, urban bank or post office savings bank. He has to furnish the details of bank a/c no. with the full address of the bank in application form. An advance stamped receipt has also to be annexed in the form.For receipt of pension member/claimant has to open an account only in State Bank of India or Punjab National Bank.
22) In case of returning of cheque what is the procedure to be followed?
Ans: Generally the cheques are returned by the bankers when the a/c number is furnished incorrect or a/c has been closed. On receipt of the cheque from the bankers the Provident Fund office will write to the member & employer about the fact & request them to intimate the bank, a/c number & detailed address. In case, the member comes to know about returning of the cheque before this, he can write to the Provident Fund office through his former employer regarding his present address & bank a/c number.
3) What is the time taken for disposal of the application in the Provident Fund office?
Ans: The claims received complete in all respects are disposed off within a maximum period of 30 days from the date of receipt of claims in the office. In case the member is not hearing anything about his application within 30 days, he can approach the Public Relation Officer.
24) What is the voluntary rate of Provident Fund contribution by the member?
Ans: As per the Act, the member has to contribute at the rate of 10% or 12% of his basic pay, D.A. & retaining allowance if any. In case the member wants to contribute more than this, voluntarily he can do so at any rate he desires. i.e. upto 100% of basic and D.A. But the employer is not bound to contribute at the enhanced rate.
Instructions for a member while sending application to Employees' Provident Fund.Instructions for a member while sending application to Employees' Provident Fund Organization:
General:1. Use the appropriate form for claiming Provident Fund Pension, withdrawal benefit/scheme certificate, Employees' Deposit Linked Insurance benefit, etc. as given below :- ·
Form-19 : To claim final settlement of Provident Fund by a member.·
Form-20 : To claim Provident Fund by nominee/legal heir on death of the member.·
Form-10-D : To claim pension. (In duplicate : If within state, In triplicate : If outside state.)·
Form-10-C : To claim withdrawal benefit/scheme certificate under Employees' Pension Scheme '95.·
Form-5IF : To claim assurance benefit under Employees' Deposit Linked Insurance '76 by nominee/legal heir of a member.·
Form-31 : To claim temporary withdrawal/advance under Employees' Provident Fund scheme'52.·
Form-13 : To effect transfer of Provident Fund/Pension from one A/C to another.
2. Ensure that all columns of the application are filled completely. 3. Information in the application form relating to name, a/c no. should agree with the detailsavailable with Employees' Provident Fund Organization; which were furnished by the employer at the time of enrolling to Provident Fund.
4. Application should be signed by the member/claimant.
5. It should be attested by the former employer. In case attestation by the former employer is not possible, it should be got attested by any other authorized official specified with application form.
6. Application for final settlement can be sent by a member on completion of 2 months from the date of leaving service, if the reason for leaving service is other than superannuation, medical ground, retrenchment and V.R.S./ Female members getting married etc.
7. Desired mode of payment can be given legibly, if the amount involved is more than Rs. 2000/-. The amount will sent by deposit in payees' bank a/c. To facilitate this, Bank a/c no., name and address of the bank should be furnished. An advance stamped receipt should also accompany this application.
8. Application may be supported by the return Form-10, showing the details of leaving service and details of contribution for the year in Form-3A, if not sent earlier by the employer. Specific additional requirements:
A) Death cases:· Nominee/legal heir should apply in Form-20 /Form-10-D /Form-5IF. ·
If the member has not executed any nomination, application should be supported by certificate of family members issued by employer/revenue official/sworn in an affidavit by the family/ member/legal certificate from a court of law. ·
Death certificate of the member. Certificate of the employer stating whether the death was while in service of the member or not.
B) Pension cases:· Joint photograph of member/spouse or the claimant should accompany the application. ·
Option for return of capital/commutation should be specified clearly. ·
Details of non-contributory period during the service, wages/salary for last 12 months should also accompany, if not already sent. ·
Details of the branch of the specified bank may be given legibly.·
Date of birth certificates of children·
In case of death away from service, an undertaking by the claimant to the effect that the member was not working / had not worked in any other covered establishment after exit from the establishment on the basis of which pension is being claimed.
Regards
Sidheshwar
9844586572
From India, Bangalore
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Pls go through below mentioned details:
FREQUENTLY ASKED QUESTIONS
1) Who will be covered by the Pension Scheme?
Ans: Every member of the ceased Family Pension Scheme 1971 and anyone who joins any covered establishment on or after 16-11-95 is compulsorily to join this scheme, provided his/her salary/wage is less than Rs. 6500/- per month at the date of appointment.
2) What is a covered establishment?
ans: Covered establishment is an establishment belonging to the class of industries / other establishments, which has been listed in the schedule appended to the Employees' Provident Fund and Miscellaneous Provisions Act 1952 and where 20 or more persons are employed.
3) If employee was a Family Pension Scheme member. He/She has left on 13-12-93 and he/she is 54 years old. He/She has taken his withdrawal benefit. Can he/she join the new scheme?
Ans: Yes, by refunding withdrawal benefit together with interest. Thereafter, he/she will be entitled to receive pension from age 58, if he/she completes at least 10 years of contributory service by then.
4) If employee is a Family Pension Scheme Member and he/she has retired after 58 years of age on 15-01-94. Can he/she join the new scheme?
Ans: Yes, anyone who has retired by reaching age 58 between 01-04-93 and 15-11-95 may join the scheme by returning the withdrawal benefit along with interest. He will be paid pension with immediate effect, from date of exit provided he has rendered 10 years of contributory service.
5) If employee is not a Family Pension Scheme member and he/she is 56 years of age, Can he/she join Family Pension?
Ans: Yes, by diverting from his/her Provident Fund balance, Family Pension Scheme contribution from date of his/her joining or 01-03-71, whichever is later.
6) Whether the Family Pension Scheme member who has attended the age of 58 years before 01-04-93 and has left employment after 01-04-93 will be admitted to the scheme as member of Family Pension Scheme, 1971?
Ans: Yes, he will be deemed to have retired after 01-04-93. On repayment of that withdrawal benefit which was paid, Pension will be paid from same date, provided he has rendered 10 years of contributory service.
7) In case Family Pension member has attained the age of 58 years between 01-04-93 and 16-11-95 then in that case whether arrears of monthly Member Pension become payable for the period earlier than 16-11-95 i.e. from the date of his/her attaining the age of 58 years which is prior to 16-11-95?
Ans: No, he/she will be deemed to have retired from 16-11-95 and pension paid accordingly.
8) Is employee the only beneficiary of Fund?
Ans: Benefit will be paid to him/her and in his/her absence to his/her family.
9) What is meant by Family?
Ans: Family means employees' spouse and children below 25 years of age.
10) Suppose an employee does not have a Family and he/she dies before receiving benefit. Does his/her pension get lost?
Ans: No, if he/she does not have a family, benefits will be paid to his/her nominee, who will receive the benefit in his/her absence.
11) Suppose member has not nominated anyone.The pension / ROC will be paid to the dependent parents.
12) Can member change his/her nomination?
Ans: He/She can change his/her nomination whenever he/she decides within the framework of rules for such nomination. In other words if he/she has a family, nomination should be in favour of a member(s) of the family. If he/she has no family he/she can nominate anyone he/she wishes.
13) How many years service is required to be eligible to receive member pension?
Ans: Minimum 10 years eligible service will entitle for member pension.
14) Employee is a member of Employees' Pension Scheme. He/She has left employment at 48 yrs. of age and 8 yrs. of service. When shall he/she receive his/her pension?
Ans: He/She can take either withdrawal benefit or can take scheme certificate so that the 8 years service can be added to any future service that he / she may put in, in any other covered establishment. By virtue of being a holder of a scheme certificate, if the member dies before 58 years widow / widower and children shall be entitled for pension.
15) What is past service pension?
Ans: This pension is for the period of membership of the Employees' Family Pension Scheme, 1971.
16) When does an employee become eligible to become a member of Employees' Provident Fund Scheme, 1952 and Employees' Deposit Linked Insurance Scheme, 1976?
Ans: An employee becomes a member of Employees Provident Fund (Employees' Provident Fund) Scheme, 1952 / Employees Deposit Linked Insurance (Employees' Deposit Linked Insurance) Scheme, 1976 immediately on joining an establishment covered under the Employees Provident Funds & Miscellaneous Provision Act, 1952.
17) What is nomination?
Ans: Every member has to give the details of himself & details of the nominee for Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes and details of family for Employees Pension Scheme, 1995 in form no. 2. A member if, is having a family can nominate any one or more persons to receive the Provident Fund on his death. In case of him having no family he can nominate any other person. Family for the purpose of Employee Provident Fund Scheme'52 means wife/husband, children, whether married or unmarried, including adopted children, if adoption is recognized and dependant parents of member. Employees Deposit Linked Insurance Scheme benefit will be paid to the nominee under Employees Provident Fund Scheme, 1952. For the purpose of Employees Pension Scheme,1995 the member has to furnish the details, such as name, relationship & age of all the family members in the form no. 2. Family for the purpose of Employees Pension Scheme, 1995 means wife/husband & children. Whenever member wants to make a change in the nomination already made for Provident Fund, or to update the details of family for Employees Pension Scheme,1995, he has to send a revised form no. 2. The form no.2 is routed through the employer.
18) What are the periodical returns to be sent by an employer to the Provident Fund Office?
Ans: The employer of an un-exempted establishment has to forward the following returns. These returns will include details required under the three schemes namely, Employees Provident Fund Scheme, 1952, Employee Deposit Linked Insurance Scheme,1976 and Employee Pension Scheme, 1995.
a) Form-9(Revised):The details of employees enrolled as members of Employees' Provident FundS'52, Employees' Deposit Linked Insurance'76 & Employees' Pension Scheme'95 on coverage of the establishment- This is to be submitted immediately after coverage, within 15 days of coverage.
b) Form-12A:The details of the contributions recovered form the members & paid along with details of employers' contribution & administrative charges- This is to be submitted monthly by 25th of following month.
c) Form-5:The details of the employees enrolled newly to the Provident Fund- To be submitted along with Form-12A every month within 15 days of the following month.
d) Form-10:The details of the employees leaving service during the month- To be submitted along with form-12A.
e) Challans:The triplicate copy of challans in token of having remitted the Provident Fund dues in the bank- to be submitted along with form-12A every month.
f) Form-2(Revised):Nomination form- To be submitted along with form-5/9.
g) Form-3A:The details of wages & contributions in respect of each member, to be prepared financial year wise- To be submitted to the Provident Fund office by 30th of April every year.
h) Form-6A:Yearly consolidated statement of contributions- To be forwarded yearly along with form-3A. It should be ensured that all the form-3A are entered in form-6A, irrespective of whether the form-3A was forwarded for the broken period and the total dues as per the form-12A for the whole year agrees with the total of form-6A within 30th April.
i) Form-5A:Return of ownership of the establishment- To be forwarded immediately after coverage & whenever there is a change in the ownership, it has to be intimated with in 15 days of change.
j) Specimen signature:Specimen signature of the officer/officers who are authorized to sign the returns/documents relating to Provident Fund forwarded immediately after coverage & whenever there is a change inauthorized officer.
19) What is the procedure to be followed by the member if the employer is not attesting his claim forms?
Ans: It is the duty of the employer under the Act & Scheme to help Employees' Provident Fund organisation to settle the Provident Fund dues of his employees. He has to complete the prescribed application within 5 days of receipt [para72(5)] forms & hand over it to the member when he leaves the service. When a member finds difficult to get the form attested by the employer, he can get the attestation of any of the following officer & send to the Provident Fund office
1. Manager of a bank.
2. By any gazetted officer.
3. Member of the Central Board of Trustees./ committee/ Regional Committee (Employees'Provident Fund Organization).
4. Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public.
20) What is the mode of payment of Provident Fund and Employees' Deposit Linked Insurance dues?
Ans: Provident Fund & Employees' Deposit Linked Insurance dues is paid by money order/ by deposit in payees' bank a/c/ through employer/ by depositing the cheque in payees' name or part of amount in annuity scheme in any nationalised bank. Payment by money order is allowed where the amount is not more than Rs. 2000/-.
21) What are the modalities to be followed for payment through cheque?
Ans: The member has to open an account in the nationalised bank, scheduled bank, urban bank or post office savings bank. He has to furnish the details of bank a/c no. with the full address of the bank in application form. An advance stamped receipt has also to be annexed in the form.For receipt of pension member/claimant has to open an account only in State Bank of India or Punjab National Bank.
22) In case of returning of cheque what is the procedure to be followed?
Ans: Generally the cheques are returned by the bankers when the a/c number is furnished incorrect or a/c has been closed. On receipt of the cheque from the bankers the Provident Fund office will write to the member & employer about the fact & request them to intimate the bank, a/c number & detailed address. In case, the member comes to know about returning of the cheque before this, he can write to the Provident Fund office through his former employer regarding his present address & bank a/c number.
3) What is the time taken for disposal of the application in the Provident Fund office?
Ans: The claims received complete in all respects are disposed off within a maximum period of 30 days from the date of receipt of claims in the office. In case the member is not hearing anything about his application within 30 days, he can approach the Public Relation Officer.
24) What is the voluntary rate of Provident Fund contribution by the member?
Ans: As per the Act, the member has to contribute at the rate of 10% or 12% of his basic pay, D.A. & retaining allowance if any. In case the member wants to contribute more than this, voluntarily he can do so at any rate he desires. i.e. upto 100% of basic and D.A. But the employer is not bound to contribute at the enhanced rate.
Instructions for a member while sending application to Employees' Provident Fund.Instructions for a member while sending application to Employees' Provident Fund Organization:
General:1. Use the appropriate form for claiming Provident Fund Pension, withdrawal benefit/scheme certificate, Employees' Deposit Linked Insurance benefit, etc. as given below :- ·
Form-19 : To claim final settlement of Provident Fund by a member.·
Form-20 : To claim Provident Fund by nominee/legal heir on death of the member.·
Form-10-D : To claim pension. (In duplicate : If within state, In triplicate : If outside state.)·
Form-10-C : To claim withdrawal benefit/scheme certificate under Employees' Pension Scheme '95.·
Form-5IF : To claim assurance benefit under Employees' Deposit Linked Insurance '76 by nominee/legal heir of a member.·
Form-31 : To claim temporary withdrawal/advance under Employees' Provident Fund scheme'52.·
Form-13 : To effect transfer of Provident Fund/Pension from one A/C to another.
2. Ensure that all columns of the application are filled completely. 3. Information in the application form relating to name, a/c no. should agree with the detailsavailable with Employees' Provident Fund Organization; which were furnished by the employer at the time of enrolling to Provident Fund.
4. Application should be signed by the member/claimant.
5. It should be attested by the former employer. In case attestation by the former employer is not possible, it should be got attested by any other authorized official specified with application form.
6. Application for final settlement can be sent by a member on completion of 2 months from the date of leaving service, if the reason for leaving service is other than superannuation, medical ground, retrenchment and V.R.S./ Female members getting married etc.
7. Desired mode of payment can be given legibly, if the amount involved is more than Rs. 2000/-. The amount will sent by deposit in payees' bank a/c. To facilitate this, Bank a/c no., name and address of the bank should be furnished. An advance stamped receipt should also accompany this application.
8. Application may be supported by the return Form-10, showing the details of leaving service and details of contribution for the year in Form-3A, if not sent earlier by the employer. Specific additional requirements:
A) Death cases:· Nominee/legal heir should apply in Form-20 /Form-10-D /Form-5IF. ·
If the member has not executed any nomination, application should be supported by certificate of family members issued by employer/revenue official/sworn in an affidavit by the family/ member/legal certificate from a court of law. ·
Death certificate of the member. Certificate of the employer stating whether the death was while in service of the member or not.
B) Pension cases:· Joint photograph of member/spouse or the claimant should accompany the application. ·
Option for return of capital/commutation should be specified clearly. ·
Details of non-contributory period during the service, wages/salary for last 12 months should also accompany, if not already sent. ·
Details of the branch of the specified bank may be given legibly.·
Date of birth certificates of children·
In case of death away from service, an undertaking by the claimant to the effect that the member was not working / had not worked in any other covered establishment after exit from the establishment on the basis of which pension is being claimed.
Regards
Sidheshwar
9844586572
From India, Bangalore
Acknowledge(0)Amend(0)
I have a query; please help.
If your work experience is like this:
Company A - Worked for 4-5 months. Got your PF account and Tax deducted as per rules. This company also has a bond that is not paid. No work experience certificate taken as well.
Company B - Worked for 14 months. Got your work experience certificate and all, but this company neither deducts tax nor deducts PF.
Company C - Has to join very soon.
In any case, will not being on the legally correct side for Company A affect Company C's recruitment from three perspectives - Tax; PAN number; PF account. 'C' doesn't know that the employee worked for 'A'.
From India, Bharat
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If your work experience is like this:
Company A - Worked for 4-5 months. Got your PF account and Tax deducted as per rules. This company also has a bond that is not paid. No work experience certificate taken as well.
Company B - Worked for 14 months. Got your work experience certificate and all, but this company neither deducts tax nor deducts PF.
Company C - Has to join very soon.
In any case, will not being on the legally correct side for Company A affect Company C's recruitment from three perspectives - Tax; PAN number; PF account. 'C' doesn't know that the employee worked for 'A'.
From India, Bharat
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Dear all,
An employee can voluntarily contribute more than 12% for PF. However, is there a limit on the contribution? To my knowledge, the maximum is 20%. Please verify if this information is correct.
Regards,
Sumit
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An employee can voluntarily contribute more than 12% for PF. However, is there a limit on the contribution? To my knowledge, the maximum is 20%. Please verify if this information is correct.
Regards,
Sumit
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Dear Ratii,
As per my knowledge and understanding, an employee should go for it. It definitely decreases the in-hand amount, but it is good when an employee receives a lump sum at the end of his/her employment. So, if we consider the long-term perspective, it is always beneficial for employees to have it deducted from their salary.
Hope my answer will satisfy your query.
Take care and best wishes.
Regards,
Ditti
From India, Delhi
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As per my knowledge and understanding, an employee should go for it. It definitely decreases the in-hand amount, but it is good when an employee receives a lump sum at the end of his/her employment. So, if we consider the long-term perspective, it is always beneficial for employees to have it deducted from their salary.
Hope my answer will satisfy your query.
Take care and best wishes.
Regards,
Ditti
From India, Delhi
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INTERNATIONAL-W ORKERS-IWs-UNDE R-THE-EMPLOYEES ’-PROVIDENT-FUN D-SCHEME-1952-A ND-THEIR-COMPLI ANCE.pdf
Provident fund.zip
PROVIDENT FUND.rar