Employees Provident Fund (And

Miscellaneous Provisions ) Act, 1952

 Objective for worker-

 compulsory contributory fund

 for the future of the employee

 after his retirement or

 for his dependants in case of his early death

 For the employer:

 Steady workforce

 For productivity and prosperity

 For the Government:

 Money invested in Government bonds and debenture

 Promote economic and social development

 Used in infrastructure projects

 Covers following needs of the worker:

 Retirement

 Family Obligation

 Financing of Insurance Policy

 Medical Care

 Education of Children

 Housing
 Meaning of Provident Fund:

 A fund

 Subscriptions or deposits

 Any class or classes of employees

 Individuals

 On their account

 Includes, any interest or increment accruing on such

contribution
 Applicability:

 Tothe whole of India except State of Jammu and

Kashmir

 Every establishment which is factory

 Engaged in any industry specified in Schedule – I

 20 or more persons are employed

 This act does not apply to the following:

1. Co-operative Societies –
 Registered under Cooperative Societies Act and
 Employing less than 50 persons and
 Working without the aid of power

2. Establishments under the control of the Central or State

Government -
 Employees are entitled to the benefit of contributory
provident fund or old age pension
 In accordance with any scheme framed by such Govt.
3. Establishment set up under any Central, Provincial or State
Act :
 Employees are entitled to the benefit of contributory
provident fund or
 Old age pension
 In accordance with any scheme framed under that Act.

4. Establishments Exempted :
 On account of Financial Problems and other Circumstances
 Any establishment if ,
 Its employees are
 In enjoyment of benefits in the nature of P.F. , pension or
gratuity,
 Which are equally favorable to employees covered by the
Act or the Scheme.
 At present the Central Govt. has framed 3 schemes:

a. The Employees Provident Fund Scheme, 1952

 For establishment of Provident Fund for employees

b. The Employees’ Pension Scheme 1995

 For providing pension benefits to employees

c. The Employees Deposit Linked Insurance Scheme,

1976
 For providing life insurance benefit to employees who
die while in service.
 Contributions:

 It provides for two types of contributions :

1. Employer’s contribution
2. Employee’s contribution

 Both of them contribute to the fund at the Rate of 12% of

i. The basic wages +
ii. Dearness Allowance +
iii. Retaining Allowance
Payable to employees per month
 An employee and an employer contribute 12% of salary
towards EPF and EPS

 Total contribution – 24% of Salary

 EPS – 8.33%

 EPF – 15.67%

 An employee is allowed to contribute more than the

above mentioned rate

 No employer is under any obligation to contribute over

and above his contribution
 Each calculation shall be calculated to the Nearest Rupee
(fraction of rupee less than 50 paise to be ignored )

 Both the contributions are to be paid by the employer

 Employer has to pay administrative charges

 Theemployer shall not allowed to deduct his share of

contribution from the wage of member

 Employeescontribution shall be recovered by Deduction

from wages only for relevant period.
Recovery of damages for default in
payment of any contribution:

 An employer makes default

i. In payment of any contribution or

ii. In transfer of accumulations or

iii. In payment of any charges payable under this act

 Reduction or waiver of damages:

 The central govt. may reduce or waive the damages

levied, in case of –

i. Change of management:

 Transfer of undertaking to workers’ co-operative

 Merger

 Amalgamation of the sick company with other

company(may allow complete waiver)
ii. BIFR (Board for Industrial and Financial
Reconstruction) recommends in writing – waiver
up to 100% may be allowed.

iii. In all other cases – reduction of damages up to

50% may be allowed.
 Recovery of money due from employer:

1. Contribution payable to fund and insurance fund

2. Accumulations in any provident fund standing to the

credit of employees

3. Accumulations to the credit of exempted employees

4. Damages recoverable for default in payment

5. Any charges payable by the employer under this act

6. Any amount in arrears in case of an exempted

establishment.
Mode of recovery:
 The authorized officer issues a Certificate to the recovery
officer, specifying the amount.

 The recovery officer on receiving such certificate recovers

the amount in following ways:

 Attachment and sale of the properties of the company.

 Arrest and detention of the employer in prison

 Appoint a receiver for mgt. of the property of the Company.

 Where attachment and sale is insufficient then the property

of the employer will be attached.
 Employees’ Deposit Linked Insurance Scheme, 1976:

 EDLI Scheme was notified with effect from 1st August, 1976

 Applicable to all the members of the EPF Scheme

 Except an exemption has been obtained for EDLI, in favour

of LIC policy

 Employer is required to contribute @ 0.5% of the wages

 Benefits are payable to the person who is entitled to receive

the PF of the deceased member
 The nominee or nominees –

 Is paid an amount equal to the average balance in the

account of PF during preceding 12 months. Or

 During the period of membership whichever is less

 Except where the average balance exceeds Rs. 35,000:

Amount shall be Rs. 35,000 + 25% of the amount in
excess of Rs. 35,000

 Subject to maximum of Rs. 60,000

 On 9.4.2010 – Cash benefit payable to the family of EPF
subscribers increase to Rs. 1,00,000

 On 15.9.2010

 Cash benefit payable to the family of EPF subscribers is

further increase to Rs. 1,30,000

 Calculated at 20 times the average monthly wages

drawn by the deceased employee in preceding 12
months of service.
 Employees’ Pension Scheme, 1995:

 Made applicable on 16the November,1995

 Replace Family Pension Scheme, 1971

 Every member of EPF, 1952 and EFP Scheme,1971

 All new entrants to the EPF, 1952

 Every member of EPF, 1952 but not a member of EFP

Scheme, 1971 has option to become a member of EPS’
1995
 Employee is not required to contribute separately.

 Only employer’s share of PF contribution (8.33%) is

diverted to pension fund.

 The Central Govt. shall pay the contribution payable to

the Employees Pension Fund in respect of an employee
who is a person with disability for 3 years.
 Service for Pension:

 Actual service rendered after 16th November, 1995 plus

 Service for which the contribution has been made

under the earlier Pension Scheme

 Person entitled for pension after 58 years with

minimum service of 10years.

 6 months or more shall be treated as one year

 Service less than 6 months shall be ignored

 Pensionable Salary:

 Average monthly pay drawn in any manner

 12 months preceding the date of exit from membership of

EPF
 Invalidity Pension:

 In case of permanent and total disablement

 During the course of employment

 Widow’s Pension: It is payable from the date following

the date of death of the member

 While in service or
 After ceases to exist in employment or
 After retirement, or
 During the period of monthly member’s pension up to the
date of her death/ remarriage.
 Children’s Pension:

 Pension to 2 children of deceased member

 Up to the age of 25 years

 In addition to widow or widower’s pension

 @ 25% of widow/widower’s pension.

 Minimum Rs. 150 per month for each child

 Orphan Pension:

 Two orphan children

 Up to the age of 25 years

 Equal to 75% of widow/widower’s pension for each child

 Minimum Rs. 250 per month for each child

 Disable Son/ Daughter:

 Permanently and totally disabled son and daughter

 Children/ Orphan Pension

 Irrespective of age and number of children

 In addition to the monthly children’s pension

 Nominee Pension:

 In case of unmarried members

 Person nominated by member

 Equal to Widow’s pension

 No nomination:
 Amount of widow pension

 To the dependant father or mother

 After the death of father to mother

 Commutation of pension –

 Member can opt for commutation

 Maximum up to 1/3 of pension to receive 100 times of

monthly pension

 E.g. Pension Rs. 600

Commuted Value = 1/3 X 600 X 100
= Rs. 20,000

 Balance on monthly basis

 Maximum pensionable salary – Rs. 6,500 per month