Dalmia pf act revised new
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  • 1. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952• To ensure compulsory Provident Fund, Employees PensionScheme and Deposit Linked Insurance in factories and otherestablishments• Applies to factories and other establishments which employ20 or more persons• Employer has to make matching contribution of 10% and12% of employees pay to Provident Fund account• Out of the employee’s contribution, 8.33% goes to thepension fund
  • 2. Applicability• Every establishment which is a factory engaged in any industry specified in Schedule 1 and in which 20 or more people are involved• Any other establishment employing 20 or more people which central government may specify by notification• Any establishment employing even less than 20 persons can be covered voluntarily under Section 1(4) of the Act• Once an establishment is covered under the Act it will continue to be governed by the Act even if the number of persons employed falls below 20
  • 3. Applicability Not Applicable To• Establishments registered under the Cooperative Societies Act employing less than 50 persons• Any other establishments belonging to or under control of state government and whose employees are entitled to benefit from Provident Fund or old age pension• Any other establishments set up under any central, provincial or state act whose employees are entitled to benefit of contributor Provident Fund or old age pension
  • 4. Central Board of Trustees• The central board of trustees comprises of chairman, vice chairman, five central government officials, 15 representatives of state government, 10 representatives of employers, 10 employee’s representatives• The executive committee comprises of chairman, 2 official members of the board, 3 representatives of the state government, 3 representatives of employers, 3 representatives of employees and Central Provident Fund Commissioner• The state board comprises of officers, Central Provident Fund Commissioner, Financial Advisor, Chief Financial Officer, Additional Provident Fund Commissioner, Regional Provident Fund Commissioner, Assistant Fund Commissioner and other employees
  • 5. Delayed Payment• Employer must pay Period of Default Rate of damages contributions payable under (Percentage of EPF and MP Act as well as his arrears per own before the 15th of following annum) month Less than two Seventeen months Above two Twenty two months and less than four months Above four Twenty seven months and less than six months Six months and Thirty seven above
  • 6. Employees of a Contractor• Responsibility of principal employer to pay contributions payable in respect of employees of contractor with administrative charges• Employer cannot deduct employer’s contribution from wages or recover it from employee Declaration at the time of taking up employment• Employer shall ask a person whether he is a member of the fund and the Account Number or the particulars of the previous employer
  • 7. Mode of Payment of Contributions• Employer will deduct from employee’s wages his contribution and along with employer’s contribution along with administrative charges, pay it to the Fund before the 15th of every month• Payment will be through separate bank drafts or cheques for contributions and administrative charges• Within twenty five days of each month, employer will give a statement of recoveries made from every employee and the employer’s contributions for each employee• When employer is adjudicated insolvent, contributions to fund will take precedence over other debts
  • 8. Protections• The amount standing to the credit of any member in the Fund shall not be liable for attachment under order of court• Only on account of employer’s contribution to the fund, employer will not reduce the wages of an employee Features of PF Act• It is a contributory social security scheme• Accumulated Fund currently earns 9.5% interest every year added to Fund• Employee can withdraw part of his Fund for contingencies like house repairs, marriage or religious functions• Fund is managed by Regional Provident Fund Commissioners• Government exempted establishments to fully manage scheme by themselves
  • 9. Provisions for Withdrawal• A member of the fund is authorized to withdraw the full amount standing to his credit (including employer’s share of contribution) in the event of retirement after superannuation or on account of total and permanent incapacity• Full accumulations may also be withdrawn if an employee (i) migrates from India for permanent settlement abroad (ii) is retrenched, or (iii) completes 15 years of membership or (iv) is suffering from leprosy or TB, or is physically or mentally incapacitated to work• On death of a person the full amount standing to his credit is to be paid to the nominee/family members in prescribed proportions (is no nominee)/to a person legally entitled to it (if no nominee or family members)• Partial withdrawals are also permitted in certain situations like illness, marriage of employee and dependents, higher education of children
  • 10. Features of PF Act• The Regional Provident Fund or exempted employers are required to invest collected funds strictly according to the norms laid the Act, which is usually in government securities• The Fund on change of job is transferable from one company to another company any where in India
  • 11. Employees’ Deposit Linked Insurance Scheme• The scheme came into force with effect from August 1, 1976• All members of Employees’ Provident Fund scheme are members of this scheme as well• To provide insurance benefits to employees covered under the Act Contribution• Employees are not required to pay any contribution• Employers are required to pay contribution at the rate of 0.5 percent of employee wages• Central government contributes 0.25% of employee wages• Employers are required to pay administrative charges at the rate of 0.01 percent of employee wages
  • 12. Employees’ Deposit Linked Insurance Scheme Benefits• In the event of death of employee, additional amount equal to average balance in provident fund account during preceding 12 months Investment• Contribution received in insurance fund till March 31, 1997 is kept in the public account of the government of India• Pattern of investment is similar to that of provident fund
  • 13. Employees’ Pension Scheme, 1995• Employees’ Provident Funds Act, 1952 was amended in 1971• This provided for Employees’ Family Pension Scheme• Substantial long term protection to family of employee who may die prematurely in service• Scheme was later merged in Employees’ Pension Scheme 1995• New scheme provides economic sustenance during old age and survivorship coverage to member and his family
  • 14. Employees’ Pension Scheme, 1995 Coverage• Coverage extends to all who were part of Family Pension Scheme, 1971 and Employee’s Provident Fund from November 16, 1995• Option to join was given to subscribers who were not members• Employees under VRS were allowed to join the scheme from April 1, 1993
  • 15. Employees’ Pension Scheme, 1995 Finance• Neither employee nor employer is required to make any additional contribution• All accumulations of ceased family fund have been merged• Since 1995, the employer share of PF contribution representing 8.33% of wages have been diverted to fund• The central government contributes 1.16% of wages to employees
  • 16. Employees’ Pension Scheme, 1995• Monthly member’s pension on superannuation/retirement and short-service pension: [Pensionable Salary x (Pensionable Service + 2)]/70• Monthly reduced pension: Reduced at the rate of 3% for every year the age falls short of 58 years• The maximum reduction however will be 25%• Permanent and total disablement pension: Minimum of Rs. 250 per month payable from date of disablement for whole life of members• Provisions for monthly pension for widows, children, orphans, and to permanently disabled son or daughter