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THE ACT IS A SOCIAL WELFARE

LEGISLATION

To provide for the institution of Provident Funds,

Pension Fund and Deposit Linked Insurance Fund.

Besides a monthly stream of income, the EPF subscription

entitles the member of the Fund to an insurance cover on his life

through the Employees Deposit Linked Insurance Scheme.

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Objective:

This act is a social security legislation which provides

three schemes i.e..

1. Family Pension (Family Pension Fund Scheme)

2. Provident Fund (Provident Fund Scheme)

3. Insurance to Employees (Employees Deposit Linked

Insurance Scheme).

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WAGE COMPONENTS OF PF

1. BASIC PAY

2. DEARNESS ALLOWANCE (on acc of rise in cost of

living)

3. CASH VALUE OF FOOD CONCESSION

4. RETAINING ALLOWANCE

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EMOLUMENTS EARNED BY THE

EMPLOYEE

While on duty

On leave with wages

Not on leave encashment

Not on House rent allowance

Not on Bonus

Not on OT

Not on any presents made by the employer

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The Act applies to Every establishment in which 20 or more are

employed.

Apprentices are not covered under the EPF Act.

Contributions Details

Employers Share 12%of Basic which is deposited in EPFaccount

Employees share 12% on Basic Of this 8.33% on max of6,500 (Basic) goes to Pension Fund

Rest of 3.67 % goes to EPF Account

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Description of

the Head

Head of

Accounts

Employees

Contribution

Employers

Contribution

Remarks

EPF A/c No: 1 12% 3.67%

FP A/c No: 10 8.33% Wage Ceiling

is Rs.6500/-

Admin. Charges A/c No: 2 1.10%

EDLI A/c No: 21 0.50%

EDLI Admn

Charges

A/c No: 22 0.01%

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If Basic is 5,000 FPF = 417EPF = 783(600+183)

If Basic is 8,000 FPF = 541EPF = 1379(960+419)

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CIRCUMSTANCES IN WHICH ACCMULATIONS

ARE PAYABLE BY WAY OF FINAL SETTLEMENT

1. On retirement from service after 55 years

2. Retirement due to permanent total disablement incapable for

work

3. Migration from India for permanent settlement abroad

4. Termination due to mass or individual retrenchment

5. On Voluntary retirement scheme

6. Termination of job and upon joining an establishment not

covered by PF

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Purpose Completed

Years

Maximum Amount

of loan

Other

Conditions

Marriage of self, son,

daughter, brother,

sister / Education of

self, son, daughter

7 years 50 % of employees

share

3 times in

service

Medical treatment ofself or family

No minimumservice

condition

Lesser of 6 times ofmonthly wages or

full employee share

For specifiedillnesses

Construction or

purchase of house /

Repayment of housingloan

5 years 36 times of monthly

wages

Only once in

service

Purchase of site/plot 5 years 24 times of monthly

wages

Only once in

service

Addition/alteration oh

house/Repair of house

5 Years/10

years afterconstruction

12 times of monthly

wages

Only once in

service

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Purpose Completed

Years

Maximum

Amount of loan

Other

Conditions

Lockout or

closure ofestablishment

No minimum

servicecondition

Monthly wages

multiplied bymonths closed

When wages for

atleast 2months not paid

Withdrawal

prior to

retirement

No minimum

service

condition

90% of total

employee and

employer

shares

Only once in

service, at least

54 years of age,

1 year before

retirement

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Spouse

And Children

Father and mother are dependants only

FAMILY MEANS

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EDLI

For this, organization contributes 0.5% of monthly Basic Pay,

capped at Rs 6500, as premium.

Payment is linked to the balance in his PF Account.

According to the latest rules, the members cover amount is

higher of the two 20 times the average wages of the past 12 months

(Upto 6,500 per month), i.e Rs 1,30,000

Or the full amount in his PF account upto 50,000 + 40% of the

balance amount.

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EMPLOYEES PENSION SCHEME 1995

Came into effect from 16th November 1995

To provide old age and post service support to workers

On Contributory basis8.33% on employer share restricted

to 6,500 Basic + DA

Earlier it was Family Pension Scheme 1971

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EMPLOYEES PENSION SCHEME 1995

I For Member

Pension Payment for life on Retirement / Superannuation

Pension Payment for life on invalidation during

employmentCapital return on option formula basis upon cessation of

members pension payment

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EMPLOYEES PENSION SCHEME 1995

I To Family Members upon Death of the Member

1. To Spouse for life or until remarriage.

2. To children (two at a time) till they attain the age of

25 years additionally along with pension to

spouse.

- For total and permanently disabled childrenpension for life

3. Orphan Pension to children at higher rate upon

cessation of Pension Payment to Spouse.

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OPTION REDUCED PENSION RETURN OF CAPITAL

Revised pension during

life time pensioner withreturn of capital on his

death

90% of original

monthly pension

100 times of original

monthly pension on deathof member to the nominee

Revised pension during

members life reduced

pension during widows

lifetime and then returnof capital to nominee

90% of original

monthly pension to the

member. On his death

80% of the originalmonthly pension to the

widow

90 times of original

monthly pension on death

of widow/remarriage to the

nominee

Pension for fixed period

of 20 years not

withstanding whetherthe member lives for

that

87.5% of the original

monthly pension for a

fixed period of 20years. The pension will

cease thereafter

100 times of original

monthly pension at the end

of 20 years from the date ofcommencement of pension

to the member if he is alive,

otherwise to his nominee