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EMPLOYEES'
PROVIDENT FUND SCHEME 1952
Employee Definition:
"Employee" as defined in Section 2(f)
of the Act means any person who is employee for wages in any
kind of work manual or otherwise, in or in connection with
the work of an establishment and who gets wages directly or
indirectly from the employer and includes any person employed
by or through a contractor in or in connection with the work
of the establishment.
Membership:
All the employees (including casual, part time, Daily wage
contract etc.) other then an excluded employee are required
to be enrolled as members of the fund the day, the Act comes
into force in such establishment.
Basic Wages:
"Basic Wages" means all emoluments which are earned by employee
while on duty or on leave or holiday with wages in either
case in accordance with the terms of the contract of employment
and witch are paid or payable in cash, but dose not include
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The cash value of any food concession;
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Any dearness allowance (that is to say, all cash payment
by whatever name called paid to an employee on account
of a rise in the cost of living), house rent allowance,
overtime allowance, bonus, commission or any other allowance
payable to the employee in respect of employment or of
work done in such employment.
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Any present made by the employer.
Excluded Employee:
"Exclude Employee" as defined under pare 2(f) of the Employees'
Provident Fund Scheme means an employee who having been a
member of the fund has withdraw the full amount of accumulation
in the fund on retirement from service after attaining the
age of 55 years; Or An employee, whose pay exceeds Rs. Five
Thousand per month at the time, otherwise entitled to become
a member of the fund.
Explanation:
'Pay' includes basic wages with dearness allowance, retaining
allowance, (if any) and cash value of food concessions admissible
thereon.
Employee Provident Fund Scheme:
Employees' Provident Fund Scheme takes care of following needs
of the members:
(i) Retirement (ii)
Medical Care
(iii) Housing
(iv) Family obligation
(v) Education of Children
(vi) Financing of Insurance Polices
How the Employees' Provident Fund
Scheme works:
As per amendment-dated 22.9.1997 in the Act, both the
employees and employer contribute to the fund at the rate
of 12% of the basic wages, dearness allowance and retaining
allowance, if any, payable to employees per month. The rate
of contribution is 10% in the case of following establishments:
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Any covered establishment with less then 20 employees,
for establishments cover prior to 22.9.97.
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Any sick industrial company as defined in clause (O)
of Sub-Section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985 and which has
been declared as such by the Board for Industrial and
Financial Reconstruction,
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Any establishment which has at the end of any financial
year accumulated losses equal to or exceeding its entire
net worth and
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Any establishment engaged in manufacturing of
(a) jute (b) Breed (d) coir and
(e) Guar gum Industries/ Factories. The contribution
under the Employees' Provident Fund Scheme by the employee
and employer will be as under with effect from 22.9.1997.
Employees' Provident Fund Interest rate:
The rate of interest is fixed by the Central Government in
consultation with the Central Board of trustees, Employees'
Provident Fund every year during March/April. The interest
is credited to the members account on monthly running balance
with effect from the last day in each year. The rate of interest
for the year 1998-99 has been notified as 12%. The rate of
interest for 99-2000 w.e.f. 1.7.'99 was 11% on monthly balances.
2000-2001 CBT recommended 10.25% to be notified by the Government.
Benefits:
A) A member of the provident fund can withdraw full
amount at the credit in the fund on retirement from service
after attaining the age of 55 year. Full amount in provident
fund can also be withdraw by the member under the following
circumstance:
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A member who has not attained the age of 55 year at
the time of termination of service.
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A member is retired on account of permanent and total
disablement due to bodily or mental infirmity.
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On migration from India for permanent settlement abroad
or for taking employment abroad.
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In the case of mass or individual retrenchment.
B) In the case of the following contingencies, the
payment of provident fund be made after complementing a continuous
period of not less than two months immediately preceding the
date on which the application for withdrawal is made by the
member:
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Where employees of close establishment are transferred
to other establishment, which is not covered under the
Act:
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Where a member is discharged and is given retrenchment
compensation under the Industrial Dispute Act, 1947.
Withdrawal before retirement:
A member can withdraw upto 90% of the amount of provident
fund at credit after attaining the age of 54 years or within
one year before actual retirement on superannuation whichever
is later. Claim application in form 19 may be submitted to
the concerned Provident Fund Office.
Accumulations of a deceased member:
Amount of Provident Fund at the credit of the deceased member
is payable to nominees/ legal heirs. Claim application in
form 20 may be submitted to the concerned Provident Fund Office.
Transfer of Provident Fund account:
Transfer of Provident Fund account from one region to
other, from Exempted Provident Fund Trust to Unexampled Fund
in a region and vice-versa can be done as per Scheme. Transfer
Application in form 13 may be submitted to the concerned Provident
Fund Office.
Nomination:
The member of Provident Fund shall make a declaration
in Form 2, a nomination conferring the right to receive the
amount that may stand to the credit in the fund in the event
of death. The member may furnish the particulars concerning
himself and his family. These particulars furnished by the
member of Provident Fund in Form 2 will help the Organization
in the building up the data bank for use in event of death
of the member.
Annual Statement of account:
As soon as possible and after the close of each period of
currency of contribution, annual statements of accounts will
de sent to each member through of the factory or other establishment
where the member was last employed. The statement of accounts
in the fund will show the opening balance at the beginning
of the period, amount contribution during the year, the total
amount of interest credited at the end of the period or any
withdrawal during the period and the closing balance at the
end of the period. Member should satisfy themselves as to
the correctness f the annual statement of accounts and any
error should be brought through employer to the notice of
the correctness Provident Fund Office within 6 months of the
receipt of the statement.
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