presentation pf new rules
TRANSCRIPT
PRESENTATION ON
EMPLOYEE PROVIDENT FUNDAct - 1952
A STATUTORY BODY UNDER MINISTRY OF LABOUR & EMPLOYEMENT
Web site: www.epfindia.org
EPF Limit increased to Rs. 15000 from Rs. 6500 wef 01.09.2014
Applicability --- From September 1, companies will have to step
up their contributions to the Employees’ Provident Fund Organisation (EPFO). A new directive, which took effect on September 1, raises the basic salary limit for PF enrolment to Rs.15,000 from Rs.6,500, bringing many new employees under the EPFO umbrella. Companies have to contribute 12 per cent of every enrolled employee’s basic salary towards PF, of which 8.33 per cent goes into a pension scheme.
Applicability -2
The minimum pension has also been hiked to Rs.1,000/month, a longstanding demand of workers’ representatives in the Employees Provident Fund Organization (EPFO). All the revised schemes will be implemented from September 1.
Applicability -2
The Gazette notification, dated August 22, also raised the maximum assured sum under the Employees’ Deposit Linked Insurance Scheme to Rs.3 lakh.
BENEFITS TO MEMBERS UNDER EPF SCHEMES
Provident Fund Benefits
Pension Benefits
Death Benefits
There are 3 major benefits
Employer also contributes to Members PF @ 12%.
EPFO guarantees the Employer contribution and credits interest at such rates as determined by the Central Government. (Present Interest Rate is 9.5%)
On resignation, the member can settle the account. i.e., the member gets his PF contribution, Employer Contribution and Interest.
1. Provident Fund benefits
Pension to Member
Pension to Family (on death of member). Scheme Certificate
Withdrawal Benefit
2. Pension benefits
Member has to attained the age of 50 years or more.
Member has to complete a total service of 10 years or more.
Member should not get any other EPF Pension.
Member has to apply in Form-10D at the EPF Office where Member has last worked through last Employer.
How to get Pension
If the member wants to draw pension from a different place, The member have to furnish appropriate Bank / Post Office address in the application form.
Pension is distributed through Post Offices or through some designated banks only (eg: Indian Bank, SBI, Indian Overseas Bank, HDFC Bank, ICICI and UTI Bank)
There Four situations when pension can be applied for:
1. On superannuation(Age 58 years or more and
atleast 10years of service)
The member can continue in service while receiving
this pensionOn attaining 58 Years of age,
a EPF member cease tobe a member of EPS
automatically2. Before superannuation(Age between 50 and 58 years
and at least ten years of service)
The member should not be in service
3. Death of the member Death while in service or Death while not in service
4. Permanent disability Permanently and totally unfit for the employment which
the member was doing at the time of such disablement
Scheme Certificate This Certificate shows the service & family details of a member
This is issued if the member has not attained the age of 58 while leaving an establishment and he applies for this certificate
Member can surrender this certificate while joining another establishment and the service stated in the certificate is added with the service he is gaining from the new establishment.
After attaining the age of 50 or above, the member can apply for Pension by surrendering this scheme certificate (if total service is at-least 10 years)
This is a better choice than Withdrawal Benefit, as a member dies holding a valid scheme certificate, his family will get pension (Death when NOT in service)
Withdrawal Benefit If not eligible for pension, member may withdraw
the amount accumulated in his pension account.
The calculation of this amount is based only on (i) Last average salary and (ii) Service (Not based on actual amount available in Pension Fund Account)
No amount is taken from Member to give Pension to the Member. Employer and Govt. contributes to Pension fund @8.33% and @1.61% respectively
EPFO guarantees pension to members, even if the Employer has not contributed to Pension Fund.
How to settle EPF account The Member has to resign or retire from the establishment and
apply for settlement of PF in Form-19. If the exit is before 55 years of age, the member should not work in any covered establishment for a period of 2 months from the exit date.
If the member dies, Family members/Nominee have to apply in Form-20 for settlement of PF (In case of death, apply in From-10D and Form-5IF for Pension and EDLI also)
How to transfer the account / What to do if joined in another establishment
The Member has to apply in From-13(R) through the NEW Employer at the EPF Office from which transfer is sought clearly stating New and Old EPF Numbers. Member has to obtain new EPF Number from the New Employer. New EPF Number will be allotted by New Employer, not by EPFO.
Employees' Deposit Linked Insurance (EDLI) Scheme
On death of a member, the Family Members or Nominee (whoever has the entitlement to claim Provident Fund amount) can claim for EDLI Benefit. Maximum amount payable is Rs. 60,000/-.
The nominee(s) have to apply in From-5IF through the Employer.
No amount is taken from the Member for this facility. Employer contributes for this.
Average PF Balance, salary and service are the factors considered for the calculation of this amount
Advance/ Withdrawals may be availed for the following purposes:
•Marriage / EducationPurpose : For the marriage/education of Self & FamilyEligibility : Should Complete atleast 7years of service.Max Amount : 50% of Emp’e ShareDocument : Apply in Form 31 thorough the Employer
•Treatment
Purpose : Treatment of Self, Family (Dependents)Eligibility : No minimum service requiredMax Amount : 6 times of Wages or Full of Emp’e ShareDocuments : Apply in Form 31 through the Employer
•Purchase or construction of Dwelling housePurpose : Purchase or Construction House/FlatEligibility : Should complete 5years only in one service.Max Amount : 36 times of Wages.Documents : Apply in Form 31 through Employer
•Repayment of Housing LoanPurpose : Payment of House LoanEligibility : Should complete 10years only in one service.Max Amount : 36 times of WagesDocuments : Apply in Form 31 through the Employer
•Purchase of PlotPurpose : Purchase of Site/PlotEligibility : Should complete 5years only in one serviceMax Amount : 24 times of WagesDocuments : Apply in Form 31 through the Employer
•Addition/Alteration of HousePurpose : Repair of houseEligibility : Should complete 5years only in one service /
Construction of House.Max Amount : 24 times of WagesDocuments : Apply in Form 31 through the Employer
•LockoutPurpose : Lockout of Closure of the EstablishmentEligibility : Should be closed for 15days / No wages for 2months.Max Amount : Total of wages multiplied by no.of months closedDocuments : Apply in Form 31 through the Employer
•Withdrawal Prior to RetirementPurpose : Withdrawal prior to RetirementEligibility : No min service, atleast 54 years of age /
1year before retirement.Max Amount : 90% of total of both sharesDocuments : Certificate from the Emp’r showing the date of
retirement / Apply in Form 31•Other Advances
Purpose : Advance in Abnormal ConditionsEligibility : Certificate of damage from appropriate authorityMax Amount : Rs. 5000/- or 50% of member’s own share of
contribution.Documents : Certificate from Appropriate authority / Form 31.
IMPORTANT:
• The amount of advance/withdrawal is not required to be refunded under normal circumstances. If the amount is not utilised, the same should be refunded with penal interest.
