Dear Sir / Madam
We had already informed you about likelihood of increase in ceiling limit of PF since last 1 year. The GOI had made those proposals in the finance Act of 2014. Now EPFO has circulated the Govt. of India Gazette Notification dated 22 August 2014 publishing the Employees’ Provident Fund (Amendment) Scheme, 2014, Employees’ Deposit Linked Insurance (Amendment) Scheme, 2014, Employees’ Pension (Amendment) Scheme, 2014 and Employees’ Pension (Second Amendment) Scheme, 2014. All amendments are set to take effect from 01 September, 2014.
At a glance:
1. Wage ceiling limit is increased from Rs 6500/- to Rs 15000/- for EPF, E-Pension and EDLI. Thus more employees will now be mandatorily covered. For employees already covered & having pf wages above Rs 6500/- will derive more benefit albeit their in-hand salary will get reduced. This will also result in overall increase in Cost to Company of employees as Employers share will also increase in equal proportion.
2. Pension to be calculated based on salary of last 60 months.
3. EDLI benefit increase by further 20%
4. Minimum monthly pension to be Rs 1000/- pm
5. New Employees joining on or after 1st September 2014 and having PF wages greater than 15000/- pm will not become member of Employees Pension Scheme. Their entire Employers contribution will be paid in PF.
I am enclosing the Notification for your reference. Do write to me in case you have any queries.
regards
bhavik chheda
| +91-9833009299
Chheda Consultancy Services : Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop Licence, etc in Mumbai, Maharashtra
From India, Pune
6We had already informed you about likelihood of increase in ceiling limit of PF since last 1 year. The GOI had made those proposals in the finance Act of 2014. Now EPFO has circulated the Govt. of India Gazette Notification dated 22 August 2014 publishing the Employees’ Provident Fund (Amendment) Scheme, 2014, Employees’ Deposit Linked Insurance (Amendment) Scheme, 2014, Employees’ Pension (Amendment) Scheme, 2014 and Employees’ Pension (Second Amendment) Scheme, 2014. All amendments are set to take effect from 01 September, 2014.
At a glance:
1. Wage ceiling limit is increased from Rs 6500/- to Rs 15000/- for EPF, E-Pension and EDLI. Thus more employees will now be mandatorily covered. For employees already covered & having pf wages above Rs 6500/- will derive more benefit albeit their in-hand salary will get reduced. This will also result in overall increase in Cost to Company of employees as Employers share will also increase in equal proportion.
2. Pension to be calculated based on salary of last 60 months.
3. EDLI benefit increase by further 20%
4. Minimum monthly pension to be Rs 1000/- pm
5. New Employees joining on or after 1st September 2014 and having PF wages greater than 15000/- pm will not become member of Employees Pension Scheme. Their entire Employers contribution will be paid in PF.
I am enclosing the Notification for your reference. Do write to me in case you have any queries.
regards
bhavik chheda
Chheda Consultancy Services : Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop Licence, etc in Mumbai, Maharashtra
From India, Pune
Dear Bhavik can you please guide us that where can we find your point no 5 in the attached notification.
From India, Pune
From India, Pune
sir
Mr. Vinay & Mr. Amit. I am enclosing pf internal circular regarding my point no 5. please refer to point no 8 of this internal circular.
besides please understand the notification in its totality. refer to the Employees' Pension (Amendment) Scheme , 2014
Sec 3.In the principal scheme, paragraph 6, clause (a)..........words" and whose pay on such date is less than or equal to fifteen thousand rupees", shall be inserted.
now please read paragraph 6 in principal scheme as below
6. Membership of the Employees' Pension Scheme -
Subject to sub-paragraph (3) of paragraph 1, the Scheme shall apply to every employee --
(a) who on or after the 16th November, 1995, becomes a member of the Employees' Provident Fund Scheme, 1952, or of the Provident Funds of the factories and other establishments exempted by the appropriate Government under section 17 of the Act, or in whose case exemption has been granted underparagraph 27 or 27-A of the
Employees' Provident Fund Scheme, 1952, from the date of such membership.
now the amended paragraph 6 is as below
6. Membership of the Employees' Pension Scheme -
Subject to sub-paragraph (3) of paragraph 1, the Scheme shall apply to every employee --
(a) who on or after the 16th November, 1995, becomes a member of the Employees' Provident Fund Scheme, 1952, or of the Provident Funds of the factories and other establishments exempted by the appropriate Government under section 17 of the Act, or in whose case exemption has been granted underparagraph 27 or 27-A of the
Employees' Provident Fund Scheme, 1952, and whose pay on such date is less than or equal to fifteen thousand rupees from the date of such membership.
thus it becomes clear that any new employee (ie fresher - having no past PF benefit history ) joining w.e.f 1st sep 2014 onwards, whose basic pay is above 15K mark will not be eligible to become pension scheme member.
hope to have cleared your query.
regards
regards
bhavik chheda
| +91-9833009299
Chheda Consultancy Services : Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop Licence, etc in Mumbai, Maharashtra
From India, Pune
Mr. Vinay & Mr. Amit. I am enclosing pf internal circular regarding my point no 5. please refer to point no 8 of this internal circular.
besides please understand the notification in its totality. refer to the Employees' Pension (Amendment) Scheme , 2014
Sec 3.In the principal scheme, paragraph 6, clause (a)..........words" and whose pay on such date is less than or equal to fifteen thousand rupees", shall be inserted.
now please read paragraph 6 in principal scheme as below
6. Membership of the Employees' Pension Scheme -
Subject to sub-paragraph (3) of paragraph 1, the Scheme shall apply to every employee --
(a) who on or after the 16th November, 1995, becomes a member of the Employees' Provident Fund Scheme, 1952, or of the Provident Funds of the factories and other establishments exempted by the appropriate Government under section 17 of the Act, or in whose case exemption has been granted underparagraph 27 or 27-A of the
Employees' Provident Fund Scheme, 1952, from the date of such membership.
now the amended paragraph 6 is as below
6. Membership of the Employees' Pension Scheme -
Subject to sub-paragraph (3) of paragraph 1, the Scheme shall apply to every employee --
(a) who on or after the 16th November, 1995, becomes a member of the Employees' Provident Fund Scheme, 1952, or of the Provident Funds of the factories and other establishments exempted by the appropriate Government under section 17 of the Act, or in whose case exemption has been granted underparagraph 27 or 27-A of the
Employees' Provident Fund Scheme, 1952, and whose pay on such date is less than or equal to fifteen thousand rupees from the date of such membership.
thus it becomes clear that any new employee (ie fresher - having no past PF benefit history ) joining w.e.f 1st sep 2014 onwards, whose basic pay is above 15K mark will not be eligible to become pension scheme member.
hope to have cleared your query.
regards
regards
bhavik chheda
Chheda Consultancy Services : Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop Licence, etc in Mumbai, Maharashtra
From India, Pune
Hi Bhavik, Your post was really very helpful, thank you very much for that. I have a question here.. I will ask with an example.. If X's basic is 20,000 and he wish to contribute to PF on the full basic pay instead of restricting the basic to 15,000. His employer also contributes equally on the full basic pay. X got enrolled to PF post 1st Sep 2014. In this case, X's contribution will be Rs.2,400 (20000 x 12%). And his employer's contribution will be 2,400 (12% of 20000) towards PF (because X is not eligible for EPS as per new amendment) plus Rs.220 (1.1% of 20000) towards PF admin charges. In addition to it, I understand that employer also has to contribute towards EDLI @ 0.5% and EDLI admin charges @ 0.01%. Can you please advise if this EDLI contribution by employer is to be calculated on the full basic pay of Rs.20000 or should the basic be restricted to Rs.15000 for the purpose of EDLI calculation? I need this info very urgently.. Please help..
From United States, Peabody
From United States, Peabody
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