Hi Everyone,
I have a question about the EPF scheme. The scheme mentions that a fresher with a basic salary exceeding ₹15,000 per month is not required to join the pension scheme. However, many organizations offer packages ranging from ₹5-7 lakh per annum to freshers, where the Basic and DA exceed the ₹15,000 threshold. Despite this, these employees are still included in the Pension scheme. Why is this the case? Is it not mandatory to exclude such employees from the pension scheme? If an audit reveals this, could it result in heavy penalties for the organization?
From India, Mumbai
I have a question about the EPF scheme. The scheme mentions that a fresher with a basic salary exceeding ₹15,000 per month is not required to join the pension scheme. However, many organizations offer packages ranging from ₹5-7 lakh per annum to freshers, where the Basic and DA exceed the ₹15,000 threshold. Despite this, these employees are still included in the Pension scheme. Why is this the case? Is it not mandatory to exclude such employees from the pension scheme? If an audit reveals this, could it result in heavy penalties for the organization?
From India, Mumbai
Hi Everyone,
I have a question regarding compliance with the government amendment to the EPS-95 scheme effective from 01/09/2014, which increased the maximum pensionable salary to ₹15,000. According to this amendment, any new employee joining an establishment and drawing a basic wage exceeding ₹15,000 per month can only become a member of the Provident Fund (PF) after submitting an option as per the provisions of Para 26(6) of the EPF Scheme. Such employees are not eligible for membership in the Pension Fund. Despite this, I have observed that some organizations offer packages ranging from ₹5-7 lakh per annum to freshers, who are then included in the Pension scheme. Why is this the case? Is it not mandatory to exclude such employees from the pension scheme? If an audit reveals this, could it result in heavy penalties for the organization?
From India, Mumbai
I have a question regarding compliance with the government amendment to the EPS-95 scheme effective from 01/09/2014, which increased the maximum pensionable salary to ₹15,000. According to this amendment, any new employee joining an establishment and drawing a basic wage exceeding ₹15,000 per month can only become a member of the Provident Fund (PF) after submitting an option as per the provisions of Para 26(6) of the EPF Scheme. Such employees are not eligible for membership in the Pension Fund. Despite this, I have observed that some organizations offer packages ranging from ₹5-7 lakh per annum to freshers, who are then included in the Pension scheme. Why is this the case? Is it not mandatory to exclude such employees from the pension scheme? If an audit reveals this, could it result in heavy penalties for the organization?
From India, Mumbai
There are conditions attached to coverage to Pension Fund. The first condition is what you have stated, that the basic and dearness allowance, ie, the salary on which PF is deducted should not be more than Rs 15000. The second condition is that the employee should not be an existing member of Pension Scheme. If he is already a member of pension scheme you should continue to contribute to pension scheme. Third condition is that this capping of salary to Rs 15000 applies only to employees joined on or after 1st September 2014. Therefore, if you have an employee who had joined prior to Sept 2014, he would be covered by Pension Scheme, and you should continue the contribution.
From India, Kannur
4246From India, Kannur
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