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
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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
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Dear Bhavik can you please guide us that where can we find your point no 5 in the attached notification.
From India, Pune
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From India, Pune
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Dear Sirs,
I am enclosing an 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 the 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 an exemption has been granted under paragraph 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 an exemption has been granted under paragraph 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 (i.e., 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 a pension scheme member.
Hope to have cleared your query.
Regards,
Bhavik Chheda
Email: bhavikhc@chhedaconsultancyservices.com | +91-9833009299
Website: Chheda Consultancy Services: Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop License, etc., in Mumbai, Maharashtra
From India, Pune
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I am enclosing an 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 the 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 an exemption has been granted under paragraph 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 an exemption has been granted under paragraph 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 (i.e., 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 a pension scheme member.
Hope to have cleared your query.
Regards,
Bhavik Chheda
Email: bhavikhc@chhedaconsultancyservices.com | +91-9833009299
Website: Chheda Consultancy Services: Consultants for Payroll Processing, Labour Laws, Provident Fund, ESIC, Professional Tax, MLWf, Shop License, etc., in Mumbai, Maharashtra
From India, Pune
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Hi Bhavik,
Your post was really 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 wishes 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 in 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 the new amendment) plus Rs. 220 (1.1% of 20000) towards PF admin charges. In addition, I understand that the employer also has to contribute towards EDLI at 0.5% and EDLI admin charges at 0.01%.
Can you please advise if this EDLI contribution by the employer is to be calculated on the full basic pay of Rs. 20,000 or should the basic be restricted to Rs. 15,000 for the purpose of EDLI calculation? I need this info urgently. Please help.
From United States, Peabody
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Your post was really 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 wishes 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 in 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 the new amendment) plus Rs. 220 (1.1% of 20000) towards PF admin charges. In addition, I understand that the employer also has to contribute towards EDLI at 0.5% and EDLI admin charges at 0.01%.
Can you please advise if this EDLI contribution by the employer is to be calculated on the full basic pay of Rs. 20,000 or should the basic be restricted to Rs. 15,000 for the purpose of EDLI calculation? I need this info urgently. Please help.
From United States, Peabody
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