The Employees Provident Funds & Miscellaneous Provision Act, 1952

As Per the Employees’ Provident Funds (Amendment) Scheme, 2014 enforced
w.e.f. 1st September, 2014. Wherever Word Rupees Six Thousand Five Hundred
(₹ 6,500/-) occurs, the word Rupees Fifteen Thousand (₹ 15,000/-)is to be substituted.

The Employees Provident Funds and Miscellaneous provisions Act, 1952 is enacted to provide a kind of social security to the industrial workers. The security, however, differs from the security provided to them under the Workmen’s Compensation Act or the Employees’ State Insurance Act. The Employees’ Provident Funds and Miscellaneous Provisions act mainly provides retirement or old age benefits, such as :—

1) Provident Fund,

2) Superannuation Pension, Individual Pension, Family pension and

3) Deposit linked insurance.

Provision for Terminal benefit of restricted nature was made in the Industrial Disputes Act, 1947, in the form of payment of retrenchment compensation. But this benefit is not available to a worker on retirement, on reaching the age of superannuation or voluntary retirement.

The Employees’ Provident Funds and Miscellaneous Provision Act, 1952 is intended to provide wider terminal benefits to the industrial workers. For example, the act provides for payment of terminal benefits in various contingencies such as retrenchment, closure, and retirement on reaching the age of superannuation, voluntary retirement, resignation and retirement due to incapacity of work.

Provident Fund

1) Provident Fund is a social Security Benefit to employees.

2) It is a compulsory saving by an employee during his employment.

3) It is meant for old age

4) This is required to be availed on retirement from service.

5) An employee who contributes to provident fund is also eligible to receive a matching contribution from his employer.

6) Your provident fund is named as “Employees Provident Fund”

Employees Provident Fund Act / Scheme

1) Employees’ Provident Fund is set up under the Central Act viz. Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, in the year 1952

2) It is applicable throughout the country.

3) It is applicable to almost all establishments falling under the industries / class of establishments, wherein 20 persons are employed

4) In the case of cinema theatres workers it is applicable to such establishments wherein 5 persons are employed.

5) Benefits to an employee are provided through the schemes framed under the Act.

6) Provident Fund benefits are provided under the Employees’ Provident funds Scheme, 1952

7) Pensions benefits are provided under the Employees’ Pension funds scheme, 1952

8) Insurance benefits are provided under the Employees’ Deposit Linked Insurance Scheme, 1976

9) A member of Employees’ Provident fund is automatically eligible for pension and Insurance benefits without paying any additional amount of contribution.

Applicability

  1. Every establishment which is a factory engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed and

  2. Any other establishment employing 20 or more persons which Central Government may by notification, specify in this behalf (Infancy period of 3 yrs has been withdrawn by ordinance, w.e.f. 22-9-1997)

  3. Any establishment employing even less than 20 persons can be covered voluntarily u/s 1(4) of the Act.

  4. Any establishment registered under Co-operative Societies Act, 1912, or any State Act of Co-operative Societies, Employing 50 or more employees’
    and working without the aid of power.

  5. The Employees’ Provident Fund act is applicable to the cinema theatre employing 5 or more workers.

    1. If an establishment consists of different departments / branches, whether located in the same place or in different places, all such departments or branches are treated as part of the same establishment.

    2. The Act continues to apply even if the number of employees falls below 20 employees

Non Applicability

Any establishment registered under Co-operative Societies Act, 1912, or any State Act of Co-operative Societies, Employing less than fifty employees and working without the aid of power.

  1. To any establishment under the control of Central / State Government, having their own scheme / rules for Contributory Provident Fund or Pension for its employees.

  2. To any establishment set up under central, Provincial or State Act having its own scheme / rules for P. F. and Pension for its own employees.

  3. To any establishment, which is exempted by the Central or State Government by notification because of its financial position.

  4. To apprentices appointed under Apprentices Act 1961 or under Standing Orders of the establishment.

  5. To employees whose pay exceeds ₹ 15,000/-(w.e.f. 1st Sept., 2014) at the time of joining service.

Eligibility

  1. Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment where salary is less than ₹15,000/- p.m. and optionally covered where salary exceeds ₹15,000/- p.m. (w.e.f. 1st Sept., 2014).

  2. Any person who is classified as disabled employee under new para 82 of the Employees Provident fund Scheme, 1952 and working in the private sector, with monthly wages upto ₹25,000/- p.m. provided they are appointed on or after 01-4-2008.

  3. Any person who is classified as International Worker under new para 83 of the Employees Provident Fund Scheme, 1952.

A contribution of P.F. is to be deducted on (as per the Supreme Court Judgment Dated : 28th Feb., 2019)

  1. On Basic Wages.

  2. Dearness Allowances. (Special Allowance in Maharashtra) & all allowance which are commonly paid to all employees.

Except following

Principles laid down for allowances to be excluded for PF Deduction of contribution:

  • Allowances which are variable in nature;

  • Allowances which are linked to any incentive for production resulting in greater output by an employee; or

  • Allowances which are not paid across the board to all employees in a particular category; or

  • Allowance which are paid especially to those who avail the opportunity.

  • House Rent Allowance

  • Overtime Allowance

  • Statutory Bonus

  • Leave Encashment

  • Production or Incentive Bonus

  • Service charges collected from customers and paid to employees

  • Notice pay in lieu of termination

  • One month wage u/s 33(2)(b) of Industrial Disputes Act

Voluntary Coverage

If the employer and the majority of employees agree by a settlement to be bound by the provisions of the act and make application to the effect to the Central Provident Fund Commissioner u/s. 1(4)

Clubbing of Two Establishment

In such cases the tests are:— 1) Unity of ownership, 2) Unity of Management, 3) Unity of Control, 4) Unity of Finance, 5) Unity of Labour, 6) Unity of employment, 7) Functional integrality, 8) Continuity of process, 9) Inter-transferability of employees.

To Compute 20 or more Employees Following Employees are Counted

The permanent, temporary, full time, part time, casual, time – rated, piece – rated employees, contract employees, persons employed in various departments, head office, branches, sales offices, godowns or any other different places etc. and sales representatives are counted for computing the employment strength. Apprentices engaged under the Apprentices Act. 1961 are not counted for the purpose of applicability.

Excluded Employee

1) An employee who, having been a member of the Fund, has withdrawn the full amount of his contribution in the Fund (a) on retirement from service after attaining the age of 55 years of (b) migration from India for permanent settlement abroad; or for taking employment abroad;

1) An employee whose pay at the time he is otherwise entitled to become a member of the fund, exceeds ₹ 15,000/- per month (w.e.f. 1st Sept., 2014)

2) A person who, according to the Certified Standing Orders, is an apprentice, or who is declared to be an apprentice by the authority specified in this behalf by the appropriate Government.

Contribution rates w.e.f 1st April 2017

Employee’s Contribution 12% and

Employers Contribution 12% plus 1.00% = 13.00%

From employers contribution out of 12% contribution 8.33% is deposited in the Employees’ Pension Fund subject to a ceiling that the contribution payable by the employer be limited the amount payable on his pay of
₹ 15,000/-pm hence maximum contribution under Employees’ Pension Fund will be ₹ 1,250/-. And balance 1.00% includes administrative charges and EDLI Contribution.

Provident Fund Challans Consist following Accountants and Rate of Contribution w.e.f 1st June 2018:–

A/c. No.

Employers

Employee

Total

Contribution

Contribution

Contribution

  

I

3.67%

12%

15.67%

II***

0.50%***

—-

0.50%***

X

8.33%

—-

8.33%

XXI

0.50%

—-

0.50%

Total
Contribution

13.00%

12%

25.00%

***Explanation on the PF Notification No : 742 Dated: 15-3-2017 for Reduction in Rate of Administrative Charges from 0.85% to 0.65% of the pay:–

w.e.f. 01/04/2017 Minimum Administrative Charges under A/c II for non-functioning Establishments/Factories shall be ₹ 75/- pm and for operational Establishments/Factories Minimum Administrative Charges shall be
₹ 500/- pm

From June 2018 Salary Admin Charges under A/c II has further reduced from 0.65% to 0.50%.

Employees’ Provident Fund Scheme Started w. e. f. 15-11-1952

Salary Slab

Rate of Contribution for Less than

Rate of Contribution for 50 or More employees

Adm. charges

Inspection charges in r/o exm. estt.

Eligibility period of membership

(₹ 1,000/-) from 1-1-1961 to
30-11-1976

(6.1/4%) from 1-1-1952 to 31-7-1988 (for less than 50 employees)

(6.1/4%) from 1-1-1952 to 31-12-1962 (For 50 or more Employees)

(0.37%) from 1-1-1952 to
30-9-1986 (min. ₹ 5/- w.e.f. 1-12-1978)

(0.09%) from 1-1-1952 till date

(240 days/ 12 moths) from
1-1-1952 to 31-8-1974

(₹ 1,600/-) from 1-12-1976 to 31-8-1985

(8.1/3%) From 1-8-1988 to 21-9-1997 (for less than 50 Employees)

(8%) from 1-1-1963 to 1-8-1988 (For 50 or more Employees)

(0.65%) from 1-10-1986 to 31-7-1988

(0.09%) from 1-11-1952 to
31-7-1998

(120 days/ 6 months) from 1-2-1981 to
31-10-1990

(₹ 2,500/-) from 1-9-1985 to 31-10-1990

(10%) from 22-9-1997 till date

(8.1/3%) from 1-8-1988 to 31-5-1989 (for 50 or more Employee)

(1.10%)from 1-8-1998 till date

(0.18%)(0.09%) from 1-8-1998 till date

(60 days/ 3 months from
1-2-1981 to
31-10-1990)

(₹ 3,500/-) from 1-11-1990 to 31-10-1990

  

(10%) from 1-6-1989 to 30-4-1997 (For 50 or more Employees)

    

On Dt. of joining from 1-11-1990 but as per CPFC circular w.e.f. 1-5-1995

(₹ 5,000/-) from 1-1-1994 to 31-5-2001

  

(10%) from 1-5-1997 to 21-9-1997 10% for 20 and above w.e.f. 1-5-1997

    

On Dt. of joining from 1-11-1990 but as per CPFC Circular w.e.f. 1-5-1995

₹ 5,000/-

  

(12%) from
22-9-1997 to
31-5-1997

      

₹ 6,500/- w.e.f. 1-6-2001

  

(12%) from 1-6-2001

From 1-4-2017 0.65%

    

₹ 15,000/- w.e.f. 1-9-2014

  

(12%) from 1-6-2001

From 1-6-2018 0.50%

    

  1. Benefits— Provided under the Scheme

There are Three kinds of Benefits Provided under the Scheme:-

  1. Withdrawl Benefit

  2. Benefit of non-refundable advances

  3. Benefit of financing of Life Insurance Policies.

(i) Withdrawl Benefit:-

  1. A member can withdraw the full amount standing to his credit in the Fund in following circumstances immediately:—

    1) Retirement after attaining the age of 55 yrs.

    2) Retirement due to incapacity of work

    3) Migration for permanent settlement abroad

    4) Mass Retrenchment

    5) Voluntary Retirement

    6) Closure of Establishment

    7) Transfer to an establishment not covered under the Act

    8) Discharge with payment of retirement compensation, etc.

  2. In all the other cases of leaving servicers he can withdraw the full amount if he remains unemployed after the waiting period of two months unemployment.

(ii) Benefit of Non-Refundable Advances:-

Non refundable advances from the amount standing to the credit of a member in the Fund can be sanctioned for the following purposes:-

1) Purchase of Dwelling Site

2) Purchase of Dwelling House/Flats

3) Construction of House

4) Illness viz Hospitalisation for more than a Month, major surgical operation, or suffering from T.B., Laprosy, Paralysis, Cancer, Heart Ailment etc.

5) Marriage of a self /son/ daughter/sister/brother

6) Post Matriculation Education of Son/Daughter.

7) Damage to the property due to natural calamity (Floor / Riot / Earthquake)

8) Member affected by cut in the supply of electricity

9) Members who is physically handicapped

10) Investment in Varishtha Pension Bima Yojana

(iii) Benefit of Financing of Life Insurance Policies

1) Where a member desires that premium due on a policy of Life Insurance taken by him on his own life should be financed from his Provident Fund Account

(Provided that no such payment shall be made unless the premium is payable yearly)

[(A member employee can also withdraw full amount standing to his credit. In fund (para 69)….]

  1. On Resignation.

  2. On Retirement from the service on attaining the age of 55yrs.

  3. On Retirement on account for permanent or total incapacity to work.

  4. Immediately before Migration from India for permanent settlement abroad or for taking up employment abroad.

  5. On Termination due to voluntary retirement scheme, retrenchment, closure of the factory / establishment.

  6. Withdrawal within one year before the retirement:- It permit withdrawal of upto 90 per cent of the amount standing at his credit, at any time after attainment of the age of 54 years by the Member or within one year before his actual retirement on superannuation, whichever is later.

  7. Option for withdrawal at the age of 55yrs for investment in Varishtha Pension Bima Yojana:- On an application from a Member in such form as may be prescribed, permit withdrawal of upto 90% of the amount standing at his credit at any time after attaining the age of 55yrs by the Member, to be transferred to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana

Rules & Regulations for Loan, Advance & Withdrawal from EPF

Minimum Service Limit for EPF Loan

Did you find yourself eligible for partial withdrawal of EPF? Do you have one of the above reasons? Yes? Still, you may not get the PF money. There is minimum service condition for each cause.

No Minimum Service Limit

  • Medical Treatment

  • Calamity

  • Pre Retirement

Minimum 5 Years of Service

  • Home or Plot Purchase

  • Construction of House

  • Alteration or Addition in Home

Minimum 7 Years of Service

  • Marriage

  • Education

Minimum 10 Years of Service

  • Home Loan Repayment

  • Home Repair

Rules of PF withdrawal before Leaving the Job

You can take the non refundable Loan from the EPF account. But it does not mean that you should prefer this option. Never try to touch the retirement fund.

You can withdraw the PF money if you leave the job and remain unemployed for 2 months. Even in some circumstances you can get PF money just after leaving the job. But to withdraw amount from EPF during the job, you have to fulfill many conditions.

  1. You have to fulfill the minimum service need. The best part is the duration of the service is total. Duration of each job is added to this calculation, given you have transferred your PF accountsto the new job. Now you can transfer the PF amount easily with the introduction of UAN.

  2. There is a limit on the amount you can withdraw. It can be up to 36 times of your wages (basic+DA). The maximum amount for withdrawal depends upon the reason of PF withdrawal.

  3. You need to give proof of the reason you have mentioned.

Let us see the conditions of partial PF withdrawal for each purpose.

PF Withdrawal for Marriage

  • You can withdraw from the EPF account on the occasion of marriage. The marriage can be of yourself, sister, brother, son or daughter.

  • The minimum service period for this advance is 7 years.

  • You can withdraw up to 50% of the total employee contribution. You can use this reason 3 times in your life.

  • Marriage invitation card along with the application should be submitted through the employer.

PF Withdrawal for Education

  • You can withdraw fund for the education of self and children.

  • You should have completed a total service of 7 years.

  • You can get up to 50% of the employee contribution.

  • This option can be used 3 times in a lifetime.

  • You should attach bonafidecertificate duly indicating the fees payable from the educational institution.

PF Advance for Medical Treatment

  • You can take an advance from PF account for the treatment of self, spouse, children and parents.

  • There should be hospitalization for more than a month. If the claimant is an employee, he should have taken leave from the organization.

  • You can avail advance in case of TB, leprosy, paralysis, cancer, mental derangement or heart ailment without the hospitalization.

  • You have to give the certificate from the doctor stating the hospitalization need. In case of above mentioned disease you need to give the certificate from specialist doctor.

  • You can take 6 times of wages (basic+DA) or total employee share, whichever is less.

  • There is no limit on the frequency.

Purchase Home or Construction Using PF Money

  • Buying home or plot is one of the most important decisions of life. We invest most of our savings on this. But do you want to compromise with your retirement years. Think about this before applying for PF withdrawal.

  • You can withdraw from PF for the purchase of a home or construction of the house only once.

  • You must have completed 5 years in service.

  • Property should be registered in the name of self or jointly with spouse

  • There should not be any joint owner of property other than the spouse.

  • You can get 36 times of wage (basic+DA) for this purpose.

  • You need to give a filled declaration form with the application.

EPF Loan for Buying a Plot

  • PF money can be also used for buying a plot.

  • You can avail the withdrawal facility for purchase of plot only once.

  • You must have completed 5 years in service.

  • There should not be any co-owner of the property other than the spouse.

  • You can get 24 times of wages (Basic+DA).

  • You need to give a copy of the purchase agreement.

  • You should give a declaration with the application.

Alteration or Addition in the House

  • You must have completed 5 years in service.

  • At least 5 years after the construction of house.

  • You can get 12 times of wages.

  • Property should be owned by you or jointly with the spouse. Only once in service.

  • Alteration proof is required.

  • Repair of House

  • All the condition is similar to the alteration of house except you have to wait at least 10 years after the construction of house.

Lockout of the Company

  • If you are not getting wage for last two months and your company is locked out or closed for at least 15 days, you can take a loan from EPF.

  • You can get the amount equal to your unpaid wages.

  • There must have balance in employee contribution.

  • You can check your PF balance through various methods.

  • If closure has been for more than 6 months, you can also use the employer’s contribution. (Do you wait for such a long time)

Withdrawal Prior To Retirement

  • You must have completed 57 years of age

  • Retirement should be after one year.

  • You can get up to 90% of the total provident fund balance.

  • You need to give a certificate from the employer stating the date of retirement.

In Case of Calamity

  • There is no condition of minimum service.

  • You have to give certificates of damage from competent authority. You can get up to 50% of the employee share.

  • No other condition.

The Form and Process of Applying for PF Advance

To get the partial amount of EPF you have two ways to apply. The first way is the preferred one. In both the method you need to attach a declaration form with the application if you are taking advance for the following purposes.

  • Flat or plot purchase

  • House construction

  • Alteration or addition

  • Repair of the house

Option 1

Now, member have very easy way to partially withdraw the EPF amount. The EPFO has come with a simple new EPF withdrawal form 31 (new). This form requires very few information

The best thing about this form is that it does not require the approval from the employer. Yes, member can directly submit this form online. But to use this easy facility, member need UAN activated and KYC done.

Option 2

If a member can’t get advance through the first method, member can apply through the employer.

member should use form 31 for the advance through the employer. member can download this form from the EPFO website.

Time to Get the PF Advance

The application submitted through the first method would take less time. member can expect money within a week. But the second method can take up to one month. It depends on employer’s promptness. Some regional PF offices take more time.

Rate of Interest on PF Accumulation as Declared by Central Government

Year

Rate of Interest

2016-2017

8.65%

2017-2018

8.55%

2018-2019

8.65%

Compound interest, at a rate determined by the Central Government from Time to Time, is paid on the amount standing to the credit of a member as on 1st day of April every year.

From 1st April 1993, the yearly interest to be computed on monthly running balance

Rate of Damages on Delayed Payment of Contribution

A)

Up to 2 Months

——

@5%per annum

B)

Above 2 Months & up to 4 months

——

@10%per annum

C)

above 4 Months & up to 6 Months

——

@15%per annum

D)

Above 6 Months

——

@25%per annum

Plus Simple Interest @ 12% P.A. is charged separately on delayed payment of contribution

Employees’ Deposit Linked Insurance Scheme, 1976, (E. D. L. I)

The purpose of the scheme is to provide life insurance benefits to the employees of the establishments covered by the E. P. F. & M. P. Act, 1952. As such, the scheme is applicable to the employees of all factories and other establishments covered by the said Act.

Benefits

Vide Notification No. 8 published in Gazette of India Part II – Section 3 – Sub-section (i) dated 8-1-2011, in paragraph 22, after sub-paragraph (2), of the Employees’ Deposit Linked Insurance Scheme, 1976 a new sub-Para 22A has been inserted, namely:

“(22A) On the death of an employee, who is a member of the Fund or a provident fund exempted under Section 17 of the Act, as the case may be, who was in the employment of the same establishment for a continuous period of twelve months, preceding the month in which he died, the persons entitled to receive the provident fund accumulations of the deceased shall, in addition to such accumulations be paid an amount, equal to :—

  1. The average monthly wages drawn (subject to a maximum of rupees six thousand five hundred before 24th May, 2016, after than ₹ 15,000/- to be considered) during the twelve months preceding the month in which he died, multiplied by twenty times, or :-

  2. The amount of benefit under sub-paragraph (i), Whichever is higher.”

In view of the above amendments, family members of deceased employee are entitled for higher EDLI benefits of ₹ 6,00,000/-, if he has served for more than 12 months or more with same establishment.

On the death of an employee insurance amount is payable to nominee or family members

Maximum benefit = ₹ 6,00,000/- (w.e.f. 24th May, 2016)

Minimum Amount Payable ₹ 2,50,000/- (Upto Two years w.e.f 15-2-2018)

For claiming EDLI Benefit Form No 5 IF to be submitted to the PF Authority.

Note:- EDLI Contribution from the Regional PF Commissioner can be obtain and subsequently this coverage can be taken from any Government or Private Insurance Companies.

Employees’ Pension Scheme, 1995

  1. Definition

Employees’ Pension Scheme is a survivor, old age and disability pension scheme. The Earlier Family Pension Scheme, 1971 offered only one type of benefit, namely survivors benefit, i.e. payment of pension to widow/widower on death of the member in service. On the other hand, the new scheme caters for three types of contingencies:-

1.

Survivor pension

:

If death occurs during service period

2.

Old Age Pension

:

Pension on Superannuation.

3.

Permanent Disability Pension

:

In the event of member suffering permanent disability while in service Minimum pension amount will be ₹ 1000/- pm. Even if not rendered pensionable service provided that he/ she has made atleast one month’s contribution to the pension fund.

  1. What is Meaning of (a) Actual Services, (b) Past Services, (c) Pensionable Services, (d) Eligible Services, and (e) Pensionable Salary?

    1. Actual Service means the service rendered from 16-11-1995 or from the date of joining, whichever is later, to the date of exit.

    2. Past Service means the service rendered from the date of joining the Family Pension Fund till 15-11-1995

    3. Pensionable Service means the service for which contributions have been received or are receivable

    4. Eligible Service means the actual service plus past service.

    5. Pensionable Salary means the average monthly pay drawn in the span of 12 months preceding the date of exit from the membership of Employees’ Pension Fund.

  2. Characteristics

In the scheme three scales of pensionary benefits have been offered according to the length of service

Early Pension on Cessation of Employment

Old age pension on account of superannuation/retirement is normally payable on attaining the age of 58 yrs or 60 yrs. However, member cannot opt for taking earlier than 58 yrs. on his exit from employment but under no circumstances pension will be payable before the age of 50 yrs. A member who desires to draw monthly pension from a date earlier than 58 yrs. of age will be allowed to draw a monthly reduced pension due on the date of exit form employment. If the member is subsequently employed in a covered establishment, his pensionable service in the scheme certificate will be taken into account for working out his full pensionable service.

Scheme Certificate

There are occasions when a member may leave employment and or may move from a covered establishment to an uncovered establishment before he reaches the date of superannuation, he may opt for a scheme Certificate. The certificate will indicate his pensionable salary and the amount of pension due on the date of exit from employment. If the member is subsequently employed in a covered establishment, his pensionable service in the scheme certificate will be taken into account for working out his family pensionable service.

Widow Pension:-

1) Widow pension is of the three categories- i) of death of the member during service ii) on the death of the member after leaving service but before attaining the age of 58 yrs. and iii) in case of death of the member after commencement of payment of monthly members pension.

2) Widow on death of the member during the service is equal to monthly member’s pension.

3) The essential conditions for grant of widow pension are as follows:-

  1. The death of the member occurred while in service.

  2. The member has contributed at least one month’s contribution.

  3. The member had not attained the age of 58 yrs.

  4. The death of the member had taken place before the commencement of monthly member’s pension.

1) Children Pension :-

  1. The member left behind three children one daughter aged 20 yrs, two sons aged 16 yrs and 12yrs, elder son will get pension. The daughter will get pension for 5 yrs by which time she will be 25 yrs of age after 5 yrs. of the vesting of pension. After the daughter ceases to be the beneficiary, the youngest child, then aged 12yrs, will start receiving pension till the age of 25 yrs.

  2. The amount of children pension will be @ 25% of widow pension for each of the two children, viz. 25% + 25% of ₹1087 or ₹272 + ₹ 272 for two children.

2) Widow Pension after Commencement of Monthly Pension

1) In case of death of the member after vesting of pension, the amount of widow pension is payable @50% of the monthly member’s pension subject minimum of
₹ 250/- p.m. for example

Mr. ‘Z’ a pensioner dies at the age of 66 yrs. leaving behind his widow aged 62 yrs.

Mr. ‘Z’ drawing pension @ ₹ 1000/-pm. The widow pension in this case will be ₹ 500/-pm.

2) In case the member leaves behind any child less than 25 yrs of age, children pension is payable for each equal to 25% of the widow pension subject to a minimum of ₹ 115/- pm.

Payment / withdrawal of Provident Fund Amount

On retirement from service after attaining 55 years of age.

  1. On retirement due to total in capacity for work caused by bodily or mental infirmity.

  2. On migration from India for permanent settlement abroad or for taking employment abroad.

  3. On termination of service

  4. On retrenchment.

  5. On termination under voluntary retirement scheme.

  6. On closure of an establishment

  7. On transfer from a factory that is covered to an establishment not covered.

  8. On discharge.

  9. On the death of a member.

    In case of death of a member, the amount is payable to the nominee and in the absence of nominee, to the members of the deceased’s family except the following:—

    1. Sons of the deceased employee or the sons of deceased sons who attained majority.

    2. Married daughters whose husbands are alive of the deceased employee or his deceased son.

  10. If it becomes payable to a person charged with murder, the payment stands suspended till the conclusion of the proceedings. If convicted, the amount is payable to eligible members. If acquitted, it is payable to him.

Procedure of Payment

  1. Every employee shall forward an application in Form 19 for payment of PF amount at his credit,

    In cases specified under clauses within Five days to the commissioner duly attested.

  2. In case of death, the application is to be sent within 5 days of its receipt by the employer.

  3. If the applicant is unable to send the application through the employer, he can send it directly to the commissioner who will forward it to the employer for re-submission to him within five days.

3) Payment of Pension Through Banks

The pension is disbursed through Nationalised Banks of the respective state. The member/ pensioner are required to open an account in the Bank where pension is desired and indicate the option in the application in Form 10-D.

Mode of Recovery of Provident Fund Dues

Any amount of contribution, damages, accumulations required to be transferred, or administrative charges due from an employer may be recovered from him in any of the following modes:-

  1. Attachments and sale of the movable or immovable property of the establishments of employer.

  2. Arrest of the employer and his detention in prison

  3. Appointing a receiver for the management of the movable or immovable properties of the establishment of employer.

The recovery shall be made by the recovery officer pursuant to a Recovery Certificate issued by the authorised officer specifying the amount of arrears.

Other Mode of Recovery of Provident Fund Dues

Besides, the modes aforesaid, the authorised officer may recover the amount by any of the following modes:-

  1. Recovery from any person of amount due from him to employee who is in arrears

  2. Application for release of money, to the court in whose custody there is money belonging to the employer

  3. Recovery by distraint and sale of movable property.

After Marriage Earlier Nomination Becomes Invalid

As per the EPF Act, only defined family members can be nominated in an EPF account.

  1. In the case of a male member ”family” means his wife, his children (whether married or unmarried), his dependent parents and his deceased son’s widow and children.

  2. In the case of a female member, “family” means – her husband, her children (whether married or unmarried), her dependant parents, her husband’s dependent parents and her deceased son’s widow and children.”

However, the rules of nomination for EPF and EPS are different.

“Family, in respect of whom nomination may be made, is defined differently for the purpose of Provident Fund Scheme and Pension Scheme.

In the case of EPF, a member has an option to nominate even his/her parents, apart from spouse and children. However, in the case of EPS, a member can nominate only his spouse and children.”

“After marriage, member can still nominate his parents (irrespective of his gender) or any other family member as defined in the law, in his EPF account. However, for pension scheme account, he can only nominate his spouse and children after his marriage.”

As per the rules, if the EPF member does not have any family member as defined above, then he/she can nominate any other person but the nomination will become invalid when the person acquires a family, as per the law.

The member is required to make nomination using Form 2.

Recently, EPFO (Employees’ Provident Fund Organisation) has launched the e-nomination facility on the member e-sewa portal.

EPF members whose account is Aadhaar-linked and verified (KYC Completed) can use the facility to make fresh nominations (e-Nomination).

Benefits to the family on the death of a Member.

  1. (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 members’ pension but [before the commencement of pension payment, or],

(c) After commencement of payment of the monthly members pension.

Note.- The cases where a member has rendered less than 10 years eligible service on the date of exit but has retained the membership of 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 case 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 of ₹ 450 or the amount indicated in Table “C” whichever is more.

Penalties

Offences / Contraventions

Penalty

Whoever makes any statement knowing it to be false or by means of misrepresentation with intention to avoid making of payment towards Employees Provident Fund or deposit Linked Insurance Fund.

Imprisonment up to 1 year or find of ₹ 5000 or both.

Commission of default in the payment of administrative charges towards Employers Provident Fund or payment of inspections charges

Imprisonment up to 3 years and fine of ₹ 5000 (minimum imprisonment for 6 months)

Commission of default in making payment of Employee’s contribution u/s. 6 of the Act

Imprisonment up to 3 years and fine of ₹ 10000/- (Minimum imprisonment for 1 year)

Commission of default in payment of contribution or administrative charges or inspection charges towards the Deposit Linked Insurance Fund

Imprisonment up to 1 year and find of ₹ 5000/- or both (minimum imprisonment for 6 months)

Commission of default or contravention in the compliance of any of the rule and provisions of the Act

Imprisonment up to 1 year or fine up to ₹ 4000

Commission of default or contravention of any of the conditions under which exception u/s. 17 was granted.

Imprisonment up to 6 months and fine up to ₹ 5000/-

Commission of any further and subsequent repetition of offence after previous conviction / offence.

Imprisonment up to 5 years and fine up to ₹ 25,000/- (minimum imprisonment 2 years.)

Comments are closed.