Employee Provident Fund Act 1952 (2)

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PresentedBy,

Saista Nasir

EMPLOYEE PROVIDENTFUND ACT 1952

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The Employees Provident Fund was instituted by anAct of Parliament in November 1952 for providing

the social security benefits to the work force engaged

in non-government sector.

It provide old-age and post service financial support

to the workers in general employed in Industrial &

Commercial Sector establishments. The scheme

provided for provident fund system on contributorybasis by the Employers and the Employees at equal

rate. It made available to the employee concerned the

accretions in the Provident Fund a/c with interest in

lump sum on retirement or leaving the job.

Introduction

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It is a mandatory, tax-qualified, defined, contribution

retrial benefit plan wherein equal contribution at thespecified rate is made by the employer and the

employee and the same is payable in lump sum on

retirement.

What is a Provident Fund ?

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Salary consists of two parts i.e. earnings &

deductions

Provident Fund is one of the statutory deduction

done by the employer at the time of salary payment

Provident Fund is governed by the Employees

Provident Fund Act 1952

Provident fund act 1952

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The Employees provident Funds Act, 1952 is enacted

to provide a kind of social security to the industrial

workers. The Act mainly provides retirement or old

age benefits, to the employee.

The Act provides for payment of terminal benefits in

various contingencies such as retrenchment, closure,

retirement on reaching the age of superannuation,voluntary retirement and retirement due to incapacity

to work.

Objective

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The act extends to the whole of India [sec .1(2)]

To every establishment which is a factory engaged in

any industry specified in schedule I and in which 20

or more persons are employed [sec. 1(3) (a)], and

As per Para 26(2) of the Employees Provident Fund

Scheme, 1952, every employee employed in or in

connection with the work of a factory orestablishment other than an excluded employee shall

entitled and

Applicability Of The Act

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required to become a member of the Fund from the date

of joining the factory or establishment.

Employee includes following persons also: -

(1)Employed by or through the contractor in or in

connection with the work of the establishment

(2)Engaged as an apprentice, not being an apprentice

under the Apprentices Act, 1961

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An employee who, having been a member of the fund, haswithdrawn the full amount of his contribution in the fund

(a) on retirement from service after attaining the age of 55

years or (b) before migration from India for permanent

settlement abroad; or for taking employment abroadAn employee whose pay at the time he is otherwise entitled

to become a member of the Fund, exceeds Rs.6,500/- per

month.

A person who, is an apprentice, or who is declared to be an

apprentice by the authority specified in this behalf by the

appropriate Government.

Excluded Employee

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Employees can take advances / withdraw the PF in case of retirement,

medical care, housing, family obligation, education of children &

financing of life Insurance Polices

Up to 90% of the PF amount can be withdrawn at the age of 54 years or

before one year of actual retirementPF amount of the deceased member is payable to nominees / legal heirs

Equal contribution by the employer

present interest rate @ 8.5%

PF A/c can be transferred if any member changes from one establishment

to other where the PF Scheme is applicable

Benefits

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Employees : 12% on Basic + DA

Employer :

(a) 3.67% on Basic + DA

(b) Administrative Charges : 1.10% on

Basic +DA

Contribution of Employee

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Apart from the financial benefits, some very important benefits

become available to employees who are members of voluntary PF

Trusts in comparison to the unexempted establishments :

Easy Availability of advances

No hassles of Dealing with Public Departments

Availability of Refundable advances

Faster transfer of accumulations for outgoing members

Faster settlement of final dues

Formation of PF Trusts

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Interest is credited to the members PF A/c on monthly

running balance

Interest rate is fixed by the Central Government in

consultation with the Central Board of trustees of

EEPF every year during March / April

The present rate of interest is 8.5%

Interest

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The member can nominate other person / persons to

receive the Fund amount in the event of his death

The nomination details provided by the members are

maintained at the Regional Provident Fund Office for

use in the event of death of the member

Nomination

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THANK YOU