My first employer was not making any contribution to EPS, but my second employer started. Now I have changed the organization, and my third employer is not contributing to EPFO. Do I need to opt out of EPS or continue as my second employer started EPS even though, in all cases, my basic salary is more than 15000?
From India, Hyderabad
Acknowledge(0)
Amend(0)
1From India, Hyderabad
Acknowledge(0)Amend(0)
Opting out of EPS will depend not only on the salary but also on the date of joining the Fund. If your first employment was after 1st September 2014 and the PF qualifying salary at the time of joining the first organization was above Rs 15,000, then your opting out of EPS was correct. Actually, it is not opting out, but you should have been excluded from EPS. Now, the second company has contributed to EPS either by mistake or due to a lack of knowledge of the law. They should not have contributed to EPS but should have contributed their share exclusively to EPF without bifurcating it as 8.33% to EPS and the remaining 3.67% to EPF.
When you join a third company, you should inform the Personnel Officer that you are an existing member of EPF and there is no way you could be excluded from PF. Naturally, if the third company has fewer than 20 employees, that establishment will not have PF registration. In such cases, you will have to wait until the establishment gets coverage first and then you can be covered by EPF.
Before that, you need to get the contributions made by the second company corrected. Otherwise, when you go for the withdrawal of PF or transfer the PF, the system will reject it, stating that your first company did not contribute to EPS or the second company did contribute to EPS, etc. Nowadays, the main objective of EPFO is the rejection of claims. Therefore, you have to correct the second company's contributions and divert the funds from EPS to EPF. It is just a reconciliation and transfer of funds for the EPFO, but they will not do it by themselves until the member reminds them of their duties every day!
From India, Kannur
Acknowledge(0)Amend(0)
When you join a third company, you should inform the Personnel Officer that you are an existing member of EPF and there is no way you could be excluded from PF. Naturally, if the third company has fewer than 20 employees, that establishment will not have PF registration. In such cases, you will have to wait until the establishment gets coverage first and then you can be covered by EPF.
Before that, you need to get the contributions made by the second company corrected. Otherwise, when you go for the withdrawal of PF or transfer the PF, the system will reject it, stating that your first company did not contribute to EPS or the second company did contribute to EPS, etc. Nowadays, the main objective of EPFO is the rejection of claims. Therefore, you have to correct the second company's contributions and divert the funds from EPS to EPF. It is just a reconciliation and transfer of funds for the EPFO, but they will not do it by themselves until the member reminds them of their duties every day!
From India, Kannur
Acknowledge(0)Amend(0)
Thanks, Madhu and T.K for such a clear answer. One doubt, my 3rd organization has more than 20 employees, and they do contribute to EPS for other employees, but I am not sure why, in my case, they contributed the whole amount to the employer PF.
Also, please correct me. Is my 3rd employer right? They should not be contributing to EPS. Instead, I should ask my 2nd employer to correct this mistake.
FYI, my joining date at the first company was in 2018.
From India, Hyderabad
Acknowledge(0)Amend(0)
Also, please correct me. Is my 3rd employer right? They should not be contributing to EPS. Instead, I should ask my 2nd employer to correct this mistake.
FYI, my joining date at the first company was in 2018.
From India, Hyderabad
Acknowledge(0)Amend(0)
Once you're enrolled in EPS, you generally stay enrolled until you're no longer eligible (reach retirement age or leave the workforce permanently). There's usually no need to opt out.
Employer contribution determines account: However, your employer's contribution decides which account receives the 8.33% contribution meant for pension.
Salary below Rs. 15,000: If your basic salary is less than Rs. 15,000 per month, the entire 8.33% goes to EPS.
Use the Unified Account Number (UAN) portal to verify your EPS account status and contributions. This will give you a clearer picture.
From United States, Phoenix
Acknowledge(0)Amend(0)
Employer contribution determines account: However, your employer's contribution decides which account receives the 8.33% contribution meant for pension.
Salary below Rs. 15,000: If your basic salary is less than Rs. 15,000 per month, the entire 8.33% goes to EPS.
Use the Unified Account Number (UAN) portal to verify your EPS account status and contributions. This will give you a clearer picture.
From United States, Phoenix
Acknowledge(0)Amend(0)
Your third organization should have contributed the entire contribution payable by the employer to EPF because your date of joining the fund is after September 2014. If you had declared that you were not covered by EPS in form 11, then they (the third company) would not have covered you under EPS also. Now, the situation is as follows, I guess:
1. Your date of joining the EPF for the first time was in 2018.
2. Your basic salary, on which PF was deducted, was above Rs 15,000 when you joined the 1st Company. Therefore, they put the entire contribution payable in EPF without bifurcating it as 8.33% to EPS and 3.67% to EPF, which was the expected procedure.
3. Your 2nd Company also contributed to EPS. Now you are a member of EPS, but you are not actually entitled to be covered by EPS.
4. Your 3rd Company started PF, and they contributed the entire 12% to EPF. This is correct because you are not entitled to become a pension fund member by law. Therefore, you need to correct the contribution made by the 2nd Company by diverting it to EPF. To do that, contact the 2nd Company and make the necessary arrangements. Nothing else could work out.
From India, Kannur
Acknowledge(0)Amend(0)
0
0
1. Your date of joining the EPF for the first time was in 2018.
2. Your basic salary, on which PF was deducted, was above Rs 15,000 when you joined the 1st Company. Therefore, they put the entire contribution payable in EPF without bifurcating it as 8.33% to EPS and 3.67% to EPF, which was the expected procedure.
3. Your 2nd Company also contributed to EPS. Now you are a member of EPS, but you are not actually entitled to be covered by EPS.
4. Your 3rd Company started PF, and they contributed the entire 12% to EPF. This is correct because you are not entitled to become a pension fund member by law. Therefore, you need to correct the contribution made by the 2nd Company by diverting it to EPF. To do that, contact the 2nd Company and make the necessary arrangements. Nothing else could work out.
From India, Kannur
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Check Failed/Partial)-The user's reply is incorrect. As per the latest regulations, employees with a basic salary exceeding Rs 15,000 are not eligible for EPS, regardless of the date of joining. The contribution should go entirely to EPF. Contact the EPFO to rectify the contribution allocation.
0
0
Employees earning a base salary plus DA of Rs. 15,000 or less are required to enroll in the scheme. You will be able to withdraw the EPS once you attain the age of 50 years. However, the amount that you receive will be at a reduced rate of interest.
Can EPS be withdrawn fully?
Ans: One cannot withdraw the full pension amount while still working. An employee can make withdrawals only when they have been unemployed for a minimum of 2 months (also, the employment tenure should be less than 10 years and more than 6 months).
It's to be examined in the light of the recent SC's judgment on capping the salary if there is any impact on this case (relevant FAQs are attached). I'm not sure if it helps..
For clarity of understanding EPF/EPS, those in need may browse these links:
- https://www.policybazaar.com/life-insurance/pension-plans/articles/employee-pension-scheme-eps/
- https://www.epfindia.gov.in/site_en/FAQ.php
From India, Bangalore
Acknowledge(0)Amend(0)
0
0
Can EPS be withdrawn fully?
Ans: One cannot withdraw the full pension amount while still working. An employee can make withdrawals only when they have been unemployed for a minimum of 2 months (also, the employment tenure should be less than 10 years and more than 6 months).
It's to be examined in the light of the recent SC's judgment on capping the salary if there is any impact on this case (relevant FAQs are attached). I'm not sure if it helps..
For clarity of understanding EPF/EPS, those in need may browse these links:
- https://www.policybazaar.com/life-insurance/pension-plans/articles/employee-pension-scheme-eps/
- https://www.epfindia.gov.in/site_en/FAQ.php
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Check Failed/Partial)-The information provided in the user reply is partially correct. Employees with a salary above Rs.15,000 are not required to enroll in EPS. Early withdrawal conditions are accurate. However, recent SC judgments on capping salary do not directly impact EPS withdrawal rules.
0
0
Engage with peers to discuss and resolve work and business challenges collaboratively. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Register and Log In.
EPS - Wage Limit increase_01.09. 2014.pdf
Calcu. pf Emp.eps.epf sample sheet for HR site..xls
CiteHR.AI
(Fact Check Failed/Partial)-The user's reply is incorrect. As per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, if an employee's basic salary exceeds Rs. 15,000, they are not eligible for the EPS scheme. The employer should contribute the entire share towards the EPF. The contribution to EPS is not required in this case.