Law of Provident fund

1. Welcome
TO
OUR PRESENTATION

2. Profile
TANZIB AHMED
ID: 20202124
SECTION: C
BATCH: 27
EMBA-510 (BUSINESS ETHICS & LEGAL
ENVIRONMENT
DEPARTMENT OF ACCOUNTING & INFORMATION
SYSTEM (AIS)
JAHANGIRNAGAR UNIVERSITY (JU)

4. Introduction
A provident fund is a government-managed, mandatory retirement
savings scheme. These funds also share some characteristics with
pension funds provided by employers. A provident fund​ is an
investment fund that is jointly established by the employer and employee
to serve as a long term savings to support an employee upon retirement.
It also represents job welfare benefits offered to the employee.

5. Objectives
1) The Employees’ Provident Fund Scheme 1952 provides for contributory
Provident Fund
2) THE GENERAL PROVIDENT FUND RULES, 1979
3) THE CONTRIBUTORY PROVIDENT FUND RULES, 1979

6. Sources of money invested in the provident
fund
1) Employee or member An amount will be deducted from the employee’s
monthly salary; it’s called the “employee’s contribution.”
2) The employer will contribute a portion into the fund each month,
besides the usual salary payment made to the employer. This contribution
in the fund is called the “employer’s contribution.”

7. Employee’s contribution:
Employee’s contribution (portion by employee/member): the amount of
money that the member contributes into the fund will be deducted from
the monthly salary at between 2-15% of the salary each month. Terms
depend on the fund scheme set by the employer.
Employer’s contribution:
Employer’s contribution (portion by employer): the amount of money
contributed by the employer each month at a rate no less than the
contribution made by the member, but not exceeding 15% of the monthly
salary. Terms depend on the fund scheme set by the employer.

9. Applicability
According to section 264 (9) of the Labour Act 2006, every permanent
employee, after completion of one year of his service in the established,
shall contribute to the fund every month to a sum which shall not be less
than seven percent and not more than eight percent of his monthly basic
salary. The law also requires the employers to pay an equal amount.
Although, the companies may make their own rules for maintaining such a
fund, however, that must not be disadvantageous to the employees than the
legal guidelines that are provided.

10. Provident Fund Rules
1. Government servants till completion of two years of service have been made optional
subscribers to the General Provident Fund;
A) The amount of advance from the Provident Fund for house building purpose has
been raised to 36months’pay subject to the present ceiling of 80 percent of the total
amount at the credit of the subscriber;
B) The system of mortgaging the property for drawls of house building advance from
the Provident Fund and assignment of Life Insurance Policy for financing it from the
Fund has been done away with;
C) The ceiling of Taka 500which could be paid to the heirs of a subscriber without the
production of usual legal authority has been raised to Taka 5,000.
2. All concerned, especially the Audit Offices are requested to bring to the notice of the
undersigned errors, omissions or discrepancies, if any in the new.

11. The statutory rate of contribution to the provident fund by the employees
and the employers, as prescribed in the Act, is 10% of the pay of the
employees. The term "wages" includes basic wage, dearness allowance,
including cash value of food concession and retaining allowance, if any.
THE EMPLOYEES' PROVIDENT FUND SCHEME, 1952

12. THE GENERAL PROVIDENT FUND RULES, 1979
Maintenance of the Fund:
The Fund shall be maintained in Bangladesh in Taka.
Eligibility to join the Fund:
All Government servants who are not required or permitted to subscribe to
the Contributory Provident Fund shall be eligible to join the Fund.
Note: A Government servant who has been re-employed on contract after
retirement may join the Fund as an optional subscriber.

13. Subscribers:
1) All eligible Government Servants who, before the coming into force of
these rules being in Service complete two years continuous service shall join
the Fund as compulsory subscriber
2) All eligible Government Servants who, before the coming into force of
these rules have not completed two years of continuous service and who enter
service on or after the commencement of these rules shall join the Fund as
compulsory sub-scribers on completion of two years of continuous service.
Provided that a Government servant may, at his option, join the Fund even
before the completion of two years’ service and discontinue subscription to
the Fund on attainment of the age of 52years.

14. Rate of subscription:
i) Pay up to Tk.
300per month
1% Of pay.
ii) Pay from Tk. 301to
Tk. 500per month
6% ‘
iii) Pay from Tk. 501to
Tk. 1000per month
9% ‘
iv) Pay from Tk.
1001to Tk.
2000per month
12% ‘
v) Pay exceeding Tk.
2000per month
15% ‘

15. THE CONTRIBUTORY PROVIDENT FUND RULES, 1979
Application:
1) These rules shall apply to every non-pensionable Government servant who-
a) Has been admitted before these rules came into force to the benefits of Contributory Provident Fund
maintained by the Government; or
b) May be admitted by the Government to the Fund after these rules come into force:
Provided that these rules shall not apply to any such servant between whom and the Government an
agreement subsists in respect of a Provident Fund, other than an agreement providing for the application to
him of these rules, and in the case of an agreement so providing, these rules shall apply subject to the terms
of such agreement.
2) Every Government servant to whom these rules apply shall be a subscriber to the Fund.
3) The balance at the credit of any Government servant in the Fund referred to in clause (a) of sub-rule (1)
shall, with effect from the date on which these rules become applicable to him be transferred to his credit in
the Fund.

16. Nomination:
A subscriber shall, as soon as may be after Joining the Fund, send to the
Account Officer a nomination in the manner laid down in rule 6 of the
General Provident Fund Rules, 1979, and the provisions of rule 6 of the said
Rules shall apply mutatis mutandis in respect of a nomination under these
rules
Subscriber’s account:
An account shall be opened in the name of each subscriber, in which shall be
credited-
a) The subscriber’s subscription:
b) Contributions made under rule 11 by the Government to the account of the
subscriber, and interest on subscription and contribution.

17. Interest:
The Government shall pay to the credit of the account of a subscriber
interest at such rate as it may, from time to time, determine for the
payment of interest on subscriptions to the General Provident Fund on
the amount at the credit of a subscriber in the said Fund and the
provisions of rule 12 of the General Provident Fund Rules, 1979 shall
apply mutatis mutandis in respect of interest payable under these rules.

18. THE SCHEDUL
List of Institutions
1. A Court of Wards
2. A College affiliated to a University established by Statute.
3. The Bangladesh Red Cross Society.
4. The Bangladesh Bank.
5. The Sonali Bank.
6. The Bangladesh Shilpa Bank.
7. The Bangladesh House Building Finance Corporation,
8. The Bangladesh Krishi Bank.
9. The Bangladesh Council of Scientific and Industrial Research
10. The Telephone Industries of Bangladesh Limited.
11. The Bangladesh Atomic Energy Council.

19. Benefit
Employees covered enjoy a benefit of social security in the form
of an attachable and non-withdraw able (except i severely
restricted circumstances like buying house, marriage, education.
Financial nest egg to which employees and employers contribute
equally throughout the covered persons employment.
This sum is payable normally on retirement or death. Other
benefits include employees’ pension scheme and employees
deposited linked insurance scheme.

20. Conclusion
Provident fund is a very strong investment tool as part of retirement
planning. However, one should not rely totally on the EPF as due to fixed
returns, it does not allow you to reap the benefits of the long-term growth in
the market. Also, the corpus which one receives at the time of retirement
may not be sufficient totally for the post-retirement life, considering
medical inflation. Other investment options should be explored to ensure
complete fulfillment of the retirement goal.