PF PPT by Manju

Provident Fund (PF): 

Provident Fund (PF) by L. Manjunathreddy (MANJU) II MSW HR Bishop Heber College, Trichy .

INDEX: 

INDEX Employees provident Fund Organisation (EPFO) Employees’ provident Fund – 1952 Employees’ pension scheme – 1995 Employees’ Deposit Linked Insurance Scheme – 1976 Who is Eligible to become a PF member Role of Employer Restructuring of Members account With draw PF and other Benefits Benefits to Members Nomination Form Mode of Payment of Benefit Claim Forms

About Employees provident Fund Organisation (EPFO) : 

About Employees provident Fund Organisation (EPFO) Employees provident Fund Organisation (EPFO) is a statutory body under the ministry of labour, Government of India, New Delhi. It administers social security schemes framed under the Employees’ provident Fund & Miscellaneous provisions Act, 1952 (Central Act) namely provident Fund, Pension and Insurance to industrial employees. Employees’ provident Fund – 1952 Employees’ pension scheme – 1995 Employees’ Deposit Linked Insurance Scheme – 1976

What is a Provident Fund ? : 

What is a Provident Fund ? It is a mandatory, tax-qualified, defined, contribution retiral benefit plan wherein equal contribution at the specified rate is made by the employer and the employee and the same is payable in lump sum on retirement.

Employees’ Provident Fund & Miscellaneous Provisions Act: 

Employees’ Provident Fund & Miscellaneous Provisions Act Following three Schemes framed under the EPF & MP Act, 1952: Employees’ Provident Fund Scheme, 1952 - came into force from 1st November, 1952 Employees’ Pension Scheme, 1971 - came into force from 1st March 1971 Later replaced by Employees’ Pension Scheme, 1995 with effect from 16th November, 1995 Employees’ Deposit Linked Insurance Scheme, 1976 - came into force from 1st August, 1976

Employees' Provident Fund Scheme - 1952: 

Employees' Provident Fund Scheme - 1952 Every employee (including part-time workers and those employed by or through contractors) shall be entitled to become a member of the Scheme from the date of joining the factory or the other establishment. (Para 26 ) Every excluded employee shall be entitled to become a member from the date he ceased to be such employee. Every member of an exempted Provident Fund on joining establishment to which the Scheme applies.

Employees' Pension Scheme - 1995 : 

Employees' Pension Scheme - 1995 Every employee who became member of the Employees' Provident Fund Scheme on or after 16-11-95. (Employee who is above the age of 58 on the date of joining the Employees' Provident Fund Scheme shall not be enrolled). Every employee who is a member of Employees' Provident Fund Scheme 1952 and who has not opted for erstwhile Employees' family pension scheme, may also become a member if he opts for Employees' Pension Scheme.

Employees’ Deposit Linked Insurance Scheme - 1976: 

Employees’ Deposit Linked Insurance Scheme - 1976 Every employee who become member of the Employees' Provident fund Scheme/exempted Provident Fund Scheme . 01% of the total on which the Employees' Deposit Linked Insurance contributions recovered subject to a minimum of Rs. 2/- per month 005% of the total wages of the employees who are entitled to become members of the Employees' Deposit Linked Insurance Scheme subject to a minimum of Re. 1 /-.

Eligibility to Membership : 

Eligibility to Membership Employees' Provident Fund Scheme Every employee (including part-time workers and those employed by or through contractors) shall be entitled to become a member of the Scheme from the date of joining the factory or the other establishment. (Para 26) Every member of an exempted Provident Fund on joining establishment to which the Scheme applies. Any employee who is not otherwise eligible to become member of the Scheme, on request by him and his employer. Every newspaper employee other than an excluded employee shall be entitled to become member of the Fund after completion of 3 months continuous service or if he has actually worked for 60 days during 3 months or less

Employees' Pension Scheme: 

Employees' Pension Scheme Every employee who became member of the Employees' Provident Fund Scheme on or after 16-11-95. (Employee who is above the age of 58 on the date of joining the Employees' Provident Fund Scheme shall not be enrolled). Every employee who is a member of Employees' Provident Fund Scheme 1952 and who has not opted for erstwhile Employees' family pension scheme, may also become a member if he opts for Employees' Pension Scheme. Every employee who was a member of Employees' Provident Fund Scheme and has left service between 1-4-93 and 15-11-95 can also join the Employees' Pension Scheme by submission of option.

Employees' Deposit Linked Insurance Scheme: 

Employees ' Deposit Linked Insurance Scheme Every employee who become member of the Employees' Provident fund Scheme/exempted Provident Fund Scheme.

Role Of an Employer : 

Role Of an Employer All employees including contract employees are to be enrolled in Provident Fund Forward the details of employees enrolled as Provident Fund member before 15 th of every month to the Regional Provident Fund Commissioner Form-5 Obtain the Nomination in Form – 2 and forward it alongwith form-5 Submit annual contribution card of each member in form-3A and 6A before 30 th April of each year Forward the applications for Advance/ Withdrawal and Final Settlement of Provident Fund account, Pension and Insurance benefits within 5 days. Distribute the PF Annual settlement of accounts in Form - 23

RESTRUCTURING OF MEMBERS’ ACCOUNT: 

13 RESTRUCTURING OF MEMBERS’ ACCOUNT Account 1 (70%) Account 2 (30%) Retirement (Age 55 years) Members Investment choice Housing Education Age 50 Critical Illness New Structure (w.e.f . 1 January 2007) Note : On 1 January 2007, members savings in Account 3 was transferred to Account 2 New contributions received after 1.1.2007 will be apportioned 70% into Account 1 and 30% into Account 2 Account 1 (60%) Account 2 (30%) Account 3 (10%) Retirement (Age 55 years) Members Investment choice Housing Education Age 50 Critical Illness Old Structure

WITHDRAWAL: 

14 WITHDRAWAL Objective: To encourage members after 55 years to withdraw their savings periodically over a longer period. Introduce flexible withdrawal options: Withdrawal at anytime subject to a minimum amount of RM2,000 at intervals of, at least, 30 days. Lump sum Monthly Payment (Minimum RM250 for a period not less than one(1) year) Members may purchase an Annuity, Private Pension or invest in other approved investments. (Members may choose any one or more of the payment options stated above).

CONTRIBUTION: 

CONTRIBUTION I. EXTENSION OF LIABILITY TO CONTRIBUTE FROM AGE 55 TO 75 YEARS Objective: To encourage members to continue to work after 55 years to enhance their retirement savings. Employees are liable to contribute to EPF up to age 75 years. II. TWO TIER CONTRIBUTION RATES Objective: To encourage continued employment for employees after age 55 and avoid burdening employers and employees with high contribution rate. Employees below age 55 years: 11% by employees and 12% by employers. Employees from age 55 years to 75 years: 50% of statutory rate of contribution of employees below age 55 ( 5.5 % by employees and 6% by employers) .

M: 

M III. DIVIDEND PAYMENT UP TO AGE 75 YEARS Objective: To encourage members after 75 years to withdraw their savings. Savings not withdrawn after age 75 years shall be transferred to the Registrar of Unclaimed Monies after 5 years, that is, at age 80. Before 1 February 2008: Dividend paid on all savings managed by the EPF Savings not withdrawn will remain with the EPF.

Benefits to Members : 

Benefits to Members Employee Provident Fund scheme 1952 The Employer must pay 12% of amount of contribution the PF accumulations will earn compound Interest The members are informed PF accumulation in every year through annual statement of accounts (form 23) PF members can avail advances/ partial withdrawals for Housing, Marriage, Illness, Closure of establishments and so on…, PF member also acquires Membership in Pension Scheme On retirement or on leaving service, PF is payable to Nominee(s)/ Family members by submission of Form 20 While contributing to EPF the member is eligible for Income tax rebate.

.: 

. Benefits under Pension Scheme Pension is boon to working class An employee is eligible for pension after 10 years of service and 58 years of age Pension is based on age, wage, and service of an employee at the time of his leaving service Early pension at reduced rate can be availed on leaving the employment, after attaining age of 50 years The payment of pension is guaranteed and assured even in cases where the employer fails to deposit the pension contributions Every year pension quantum may increase No age and service stipulation to claim Disablement Pension.

.: 

. Sl No: Benefits to Members Benefits to Family Members 1 Withdrawal Benefit Widow pension Scheme certificate Children pension 2 Pension Superannuation Pension Early Pension Disabled Pension Orphan pension Disabled children pension Nominee pension 3 Commutation of pension Dependent parent pe 4 Option for Return of Capital Return of capital to nominee

.: 

. Benefits under Employees’ Deposit Linked Insurance Scheme (EDLIS)1976 A member of PF is also a member of EDLI Scheme In case of death of an employee, while in service, insurance benefit upto Rs. 60,000/- is payable to the nominee/ family members No contribution is required to be paid by the employee for the insurance benefit The employer alone is required to pay the contribution.

Mode of payment of Benefit: 

Mode of payment of Benefit The benefits payable to the EPF members towards Advances/ Withdrawals, Final payments are normally paid through Postal Money order Through savings Bank account in a Bank/ Po0st office (kept on payee’s name) Payment by money order will be made where the amount due for payment is upto Rs,. 2000/-. The Mode of payment is applicable to Pension Scheme and EDLI benefit scheme.

.: 

. Sl No: Form No: Purpose Scheme Provisions 1 Form -13 (Revised) Application for seeking transfer of account by a member Para 57 of EPFS, 52 2 Form -14 Application for financing a life insurance policy out of accumulation (employee share) of the member Para 62 of EPFS, 52 3 Form -19 Application for claiming PF accumulations dues on leaving service/ retirement Para69 of EPFS, 52 4 Form -20 Application for claiming PF accumulations of the deceased PF member by Nominee/ family member/ Legal Heir. Para 70of EPFS, 52 5 Form -31 Common form for all types of advances/ withdrawals for specified purposes from the fund (other than final settlement) Para 68of EPFS, 52 6 Form -10C Application for claiming the withdrawal / Refund of benefits or Scheme certificate under EPS’ 95 Para14 (1) of EPS’ 95 7 Form -10D Application for claiming the monthly pension under EPS’ 95 by member/ family members of member / nominee Para12&16 of EPS’ 95 8 Form -5(IF) Application for claiming the assurance benefit under the EDLI scheme , 1976 Para24 of EDLI, 76

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