Employees' Provident Fund, India



The Employees’ Provident Fund came into existence with the promulgation of the Employees’ Provident Funds Ordinance on the 15th November, 1951. It was replaced by the Employees’ Provident Funds Act, 1952. It is now referred as the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 which extends to the whole of Indian except Jammu and Kashmir. The Employees' Provident Funds Bill was introduced in the Parliament as Bill Number 15 of the year 1952 as a Bill to provide for the institution of provident funds for employees in factories and other establishments.


Since its enactment in 1952, the Act has been amended 15 times.(list of all amending Acts- on clicking each amendment Act, the text of the amendment Act may open).


The Act and Schemes framed there under are administered by a tri-partite Board known as the Central Board of Trustees, Employees' Provident Fund, consisting of representatives of :-

    
  1. Government (Both Central and State),
  2. Employers, and
  3. Employees

The Board administers a contributory provident fund, pension scheme and an insurance scheme for the workforce engaged in the organized sector in India. It is one of the world’s largest organizations in terms of clientele and the volume of financial transactions undertaken by it. The Board is assisted by the Employees’ PF Organization (EPFO), consisting of offices at 120 locations across the country. The EPFO is under the administrative control of Ministry of Labour and Employment, Government of India (click here). The Organization also has a well equipped training set up where officers and employees of the Organization as well as Representatives of the Employers and Employees attend sessions for trainings and seminars.

The Board operates three schemes viz. :-


  1. The Employees' Provident Funds Scheme 1952 (EPF)
  2. The Employees' Pension Scheme 1995 (EPS)
  3. The Employees' Deposit Linked Insurance Scheme 1976 (EDLI)

The benefits admissible under each of the three schemes and the financing of the three schemes is indicated in the table below : –


 
Employees’ Provident Fund Scheme, 1952
Employees' Pension Scheme, 1995
Employees’ Deposit Linked Insurance Scheme, 1976
Benefits:

Accumulation plus interest upon retirement, resignation , death.

Partial withdrawals allowed for specific expenses such as house construction, higher education, marriage, illness etc.

Monthly benefits for superannuation/ retirement, disability, survivor, widow (er), children.

Amount of pension based on average salary during the preceding 12 months from the date of exit and total years of employment.

Minimum pension on disablement.

Past service benefit to participants of erstwhile Family Pension Scheme, 1971.

The benefit provided in case of death of an employee who was member of the scheme at the time of the death,

The family will get 20 times of the average wages of the last 12 months of the member.

According to the revised scheme, maximum benefits under the scheme will now be Rs. 1,30,000/- , as the wage ceiling upto which contribution can be paid under the scheme is Rs. 6500/-.

Declaration:

Any person joining an establishment, to which the EPF & MP Act applies, shall compulsorily submit a declaration to his/her employer, whether he/she is already a member of Provident Fund (Form 11). This will ensure continuity of service and consequential benefits.

In case he/she was a member he/she shall also apply in Form 13 for getting the old account details and the fund balance to the new account.

Nomination:

There is a common Form for all the three Schemes. Form 2 (R) The nominations in case of EPF Scheme are also applicable for the EDLI Scheme.

Member having family can nominate any one or more of the family members as defined under the Para 2 (f) of the EPF Scheme, 1952.

Member not having any family member as defined in the said Para can nominate any other person, but the nomination will become invalid in case of the member acquiring family.

Member has to give the names of Spouse and all children in the prescribed Form.

In case the member has no family, one person can be nominated.

However, such nomination will become invalid once the member acquires a family.

The nomination under the EPF Scheme will be applicable for the EDLI Scheme also.

Claim Forms:

For final settlement by member: Form 19

For Transfer of old account to the new one: Form 13

For Withdrawal in certain cases: Form 31

For financing LIC Policy: Form 14

For final settlement in favour of nominee/ beneficiary of a deceased member: Form 20

For Monthly Pension: Form 10D

For Withdrawal Benefit and Scheme Certificate: Form 10C

For claiming Insurance Benefit by a nominee/ beneficiary in case of member’s death while in service: Form 5IF

A member can view online the status of his Claim submitted to PF Office (Click Here).

An employee working for an establishment can check whether the establishment in which he/she is working is covered under the EPF & MP ACT 1952 (Click Here).

He/she can also check whether his/her PF deductions are deposited by the employer. This information is available from financial year 2012-13 (Click Here).

A member can register himself/herself on the Member Portal and download his/her e-passbook having transaction wise details in PF Account.


As on date, the Act extends to 187 classes of establishments. Any establishment falling in any of the 187 categories mentioned above and employing more than 19 persons automatically comes under the purview of the EPF & MP Act 1952.

On coming under the purview of the Act the employers are required to submit Particulars of Ownership, [Form 5A] and comply with the relevant statutory provisions.

The contribution rates (% of wages) for financing and administering the benefits under the EPF & MP Act are given below:-


 
CONTRIBUTION ACCOUNTS
ADMINISTRATION ACCOUNTS
TOTAL
EPF
EPS
EDLI
EPF
EDLI
EMPLOYEE
12
0
0
0
0
12
EMPLOYER
3.67
8.33
0.5
1.10
0.01
13.61
TOTAL
15.67
8.33
0.5
1.10
0.01
25.61

Thus employers and employees both contribute @ 12% of wages in Contribution accounts. Further, the employers also contribute towards administration of the benefits under the Act.

The rate of contribution for certain category of establishments is 10%. These are :-

  • Any establishment in which less than 20 employees are employed.

  • Any sick industrial company and which has been declared as such by the Board for Industrial and Financial Reconstruction

  • Any establishment which has at the end of any financial year has accumulated losses equal to or exceeding its entire net worth, and

  • Any establishment in following industries :- Jute, Beedi, Brick, Coir and Guar gum Factories.

The contributions are statutorily payable upto a prescribed wage ceiling, which is Rs 6500/- as on date.
The contributions are invested as per the prescribed Pattern of Investment.
The Members’ Provident Fund Balances earn interest as per the rate of interest declared annually by the Government of India.