EMPLOYEES PROVIDENT FUND INTRODUCTION Employees Provident Funds and Miscellaneous Provisions Act, 1952 comprises of following three

schemes: - Employees Provident Fund Scheme 1952 - Employees Deposit Linked Scheme 1976 - Employees Pension Scheme 1995 (earlier the Family Pension Scheme 1971) OBJECTIVE The primary objective of these schemes is to provide social security and to inculcate amongst the workers a spirit of savings while they are gainfully employed and to make provision for benefit after they retire from service and for their family members after their death. For New Entrants:

Enrolment: An employee is eligible for membership from the day he joins the covered establishment. If the employees emoluments exceed Rs. 6,500/- per month, he has the option to join the Scheme(s) with the consent of employer. Declare previous employment details, if any, in Form No. 11 to the employer. On becoming a member of the Schemes file details in Form No. 2 ( family particulars/ nominations) through the employer. Rate of contribution payable by a member shall be @ 12% of his emoluments. A member can contribute statutorily over and above the prescribed rate.

APPLICABILITY It applies:

(a) to every establishment which is a factory engaged in any industry specified in Schedule I and in which 4[twenty] or more persons are employed, and (b) to any other establishment employing 4[twenty] or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf: PROVIDED that the Central Government may, after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than 4[twenty] as may be specified in the notification.] EMPLOYEE DEFINITION Employee as defined in Section 2(f) of the Act means any person who is employed for wages in any kind of work manual or otherwise, in or in connection with the work of an establishment and who gets wages directly or indirectly form the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment. BASIC WAGES Basic Wages means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash, but does not include (i) (ii) the cash value of any food concession; any dearness allowance ( that is to say, all cash payment by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of employment or of work done in such employment; any presents made by the employer.

(iii)

EMPLOYEES PROVIDENT FUND SCHEME Employees Provident Fund Scheme takes care of following needs of the members: (i) Retirement (ii) Medical Care (iii) Housing (iv) Family obligations (v) Education of Children (vi) Financing of Insurance Policy

Establishment to include all departments and branches For the removal of doubts, it is hereby declared that where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment.

CONTRIBUTION AS PERCENTAGE OF WAGES Name of the Employee Scheme Provident Fund 12% Scheme Employer Central GovtS NIL

Insurance Scheme Pension Scheme

NIL NIL

Amount > 8.33% (in case where contribution is 12% of 10%) 10% (in case of Certain Establishments as per details given earlier) 0.5% NIL 8.33% (Diverted out of Provident Fund

1.16%

BENEFITS A) A member of the Provident Fund can withdraw full amount at the credit in the fund on retirement from service after attaining the age of 55 years. Full amount in Provident Fund can also be withdrawn by the member under the following circumstances : (i) A member who has not attained the age of 55 years at the time of termination of service. (ii) A member is retired on account of permanent and total disablement due to bodily or mental infirmity. (iii) On migration from India for permanent settlement abroad or for taking employment abroad. (iv) In case of mass or individual retrenchment.

B) In case of the following contingencies , the payment of provident fund be made after completing a continuous period of not less than two months immediately preceding the date on which the application for withdrawal is made by the member: i) where employees of close establishments are transferred to other establishment , which is not covered under the Act; ii) where a member is discharged and is given retrenchment compensation under the Industrial dispute Act 1947. WITHDRAWAL BEFORE RETIREMENT A member can withdraw upto 90% of the amount of provident fund at credit after attaining the age of 54 years or within one year before actual retirement on superannuation whichever is later. PARTIAL WITHDRAWAL / ADVANCES A member of provident fund is allowed non refundable advances for the following contingencies: (i) For acquiring immovable property (ii) Advances in special cases such as lock out in factory / establishment ; where a member has challenged the retrenchment / dismissal by the employer in a Court of Law. (iii) For treatment of illness. (iv) For marriages or post matriculation education of children. (v) Under abnormal conditions such as damage to movable or immovable property by calamity of exceptional nature. (vi) Financing of member s Life Insurance Policy The partial withdrawals are allowed on completion of minimum of 5 years of membership of the fund and such other certain conditions for house building and 7 years of membership in other cases. TRANSFER OF PROVIDENT FUND ACCOUNT Transfer of provident fund account from one region to other, from Exempted Provident Fund Trust to Unexempted Fund in a region and vice- versa can be done as per Scheme. NOMINATION The member of Provident Fund shall make a declaration in Form 2, a nomination conferring the right to receive the amount that may stand to the credit in the fund in the event of death. The member may furnish the particulars concerning himself and his family. These particulars furnished by

the member of Provident Fund in Form 2 will help the organization in building up the data bank for use in the event of death of the member. ANNUAL STATEMENT OF ACCOUNTS As soon as possible and after the close of each period of currency of contribution, annual statement of accounts will be sent to each member through employer of the factory or other establishment where the member was not employed. The statement of accounts in the fund will show the opening balance at beginning of the period, amount contributed during the year , the total amount of interest credited at the end of the period or any withdrawal during the period and the closing balance at the end of the period. Members should satisfy themselves as to the correctness of the annual statement of accounts and any error should be brought through employer to the notice of the concerned Provident Fund Office within 6 months of the receipt of the statement.

EMPLOYEES DEPOSIT LINKED INSURANCE SCHEME, 1976 APPLICABIITY Scheme is applicable to all the members of the Employees Provident Fund Scheme 1952. MEMBERSHIP All members of Employees Provident Fund Scheme are deemed to be the members of Employees Deposit Linked Insurance Scheme 1976, unless exemption has been obtained for Employees Deposit Linked Insurance Scheme, in favour of Life Insurance Corporation policy as approved. CONTRIBUTION Employees are not required to contribute under employees Deposit Linked Insurance Scheme. The employer is required to contribute at the rate of 0.5 % of the wages of the members on which the Provident Fund has been paid. BENEFITS Benefits under Employees Deposit Linked Insurance Scheme, 1976 are payable to the person who is entitled to receive the provident fund of the deceased member. On the death of the member of the Employees Provident Fund, the claimant is paid an amount equal to the average balance in the

account of provident fund during preceding 12 months or during the period of membership whichever is less, except where the average balance exceeds Rs. 25,000/- , the amount shall be 25, 000/- plus 25% of the amount in excess of Rs. 25, 000/- subject to a maximum of Rs. 35,000/-. EMPLOYEES PENSION SCHEME, 1995 INTRODUCTION Employees Pension Scheme 1995 has been applicable on 16. 11. 1995 retrospectively with effect from 1.4.1993. This new scheme replaces the erstwhile Family Pension Scheme 1971. MEMBERSHIP (i) (ii) (iii) Every member of the Employees Provident Fund Scheme 1952 and opted for Employees Family Pension Scheme 1971. All new entrants to the Employees Provident Fund Scheme 1952 will become member of the Employees Pension Scheme 1995 on compulsory basis. Every employee who has ceased to be the member of the Employees Family Pension Scheme 1971 during 1.4.1993 and 15.11.1995 was given option to become member of the Employees Pension scheme 1995 upto 31.3.1998. Every existing member of the Employees Provident Fund Scheme 1952 not being member of Family Pension Scheme 1971 has option to become member of Employees Pension Scheme 1995.

(iv)

OPTION REQUIREMENT a. Members who have died during 1.4.1993 and 12\5.11.1995 shall be deemed to have exercised option of joining Employees Pension Scheme 1995 with effect from date of death. b. Members who are alive may exercise option to become member of the Employees Pension Scheme 1995 on the date of exit from the employment by depositing amount along with interest at the rate of 8.5 per cent per annum from date of such withdrawal. c. Members will have option to join Employees Pension Scheme 1995 by depositing the contribution along with uptodate ceased Employees Family Pension Scheme 1971 with effect from 1.3.1971.

CONTRIBUTION Employee is not required to contribute separately under the Employees Pension Scheme 1995. Employer share of Provident fund Contribution at the rate of 8.33% is diverted to Pension Fund every month. SERVICE FOR PENSION Actual service rendered after 16.11.1995 together with the service for which the contribution has been made under the ceased Family Pension Scheme 1971, if any will be treated as service for pension. A person is entitled for pension after completing the age of 58 years with minimum service of 10 years. Six Months or more shall be treated as one year and the service less than six months shall be ignored. DETERMINATION OF PENSIONABLE SALARY Pensionable salary shall be the average monthly pay drawn in any manner including on piece rate basis during the contributory period of service in the span of 12 months preceding the date of exit from membership of the Employees Provident Fund. BENEFITS Monthly Member Pension Superannuation pension / retirement the age of 58 years. Pension Scheme Certificate Document indicating pensionable service and the amount of reduced pension on the date of exit from employment which shall be counted for determination of pension along with fresh service where the member has not attained the age of retirement. Invalidity Pension In case of permanent and total disablement during the course of employment. Widow pension Pension from the date following the date of death of the member whether in service or after exit of employment or after retirement/commencement of monthly member pension.

Children Pension - Pension to two children of deceased member up to the age of 25 years in addition to widow. Orphan Pension Two orphan children up to the age of 25 years entitled for monthly orphan pension equal to 75% of the amount of window pension. Nominee Pension In case of unmarried members, a person nominated by the member will get pension equal to widow pension.

WITHDRAWAL BENIFTS A member is allowed withdrawal benefit where a minimum of pensionable service of 10 years has not been rendered on the date of exit / on attaining age of 58 years.

Administrative Charges a)Employees' Provident Fund Scheme: 1.10% of total wages on which Provident Fund is recovered subject to a minimum of Rs. 5/- shall be payable by the employer every month . Prior to 1.8.98, w.e.f. 1.8.98 .65% of total wages b) Employees' Pension Scheme Scheme: No administrative charges are payable by the employer .The entire cost of administration is met by Central Government . c) Employees' Deposit Linked Insurance Scheme: 0.01% of the total on which the Employees' Deposit Linked Insurance contributions recovered subject to a minimum of Rs. 2/- per month . Inspection Charges a) Employees' Provident Fund Scheme: 0.18% of the total wages on which Provident Fund is recovered . b) Employees' Pension Scheme Scheme: Nil . c) Employees' Deposit Linked Insurance Scheme: 0.005% 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/-

Duties of Employer

Enrol all categories of employees including the employees engaged by or through contractors and also piece rated, hourly rated employees. Remit the contributions and administrative charges before the 15th of the following month. File the initial returns of Form 9, Form 3(P.S.), form 5A. File the monthly returns in Form 12A, Form 5, Form 10 and Challans for remitting the dues. Maintain the contribution card in respect of each employee in Form 3A and submit the annual returns in Form 3A and 6A after reconciliation with Challans and form 12A. The employer has to ensure that statutory dues in respect of contractors employees are remitted and returns filed. Employer should attest the form No.2 and the claims forms submitted by the member/ legal heirs/ nominees. Make available all relevant records for inspection of visiting officials with due authorisation.

Penalties (1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act 132[the Scheme, 133[,the 127[Pension] Scheme] or the Insurance Scheme] or of enabling any other person to avoid such payment knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to 134[one year, or with fine of five thousand rupees, or with both]. (1A) An employer who contravenes, or makes default in complying with, the provisions of section 6 or clause (a) of sub-section (3) of section 17 in so far as it relates to the payment of inspection charges, or para 38 of the Scheme insofar as it relates to the payment of administrative charges, shall be punishable with imprisonment for a term which may extend to 136 [three years] but (a) which shall not be less than 137[one year and fine of ten thousand rupees] in case of default in payment of employees' contribution which has been deducted by the employer from the employees' wages; [(b) which shall not be less than six months and fine of five thousand rupees, in any other case:] 139 [***] PROVIDED that the court may, for any adequate and special reasons to be recorded in the judgement, impose a sentence of imprisonment for a lesser term 140[***] 141 [(1B) An employer who contravenes, or makes default in complying with, the provisions of section 6C, or clause (a) of sub-section (3A) of section 17 in

so far as it relates to payment of inspection charges, shall be punishable with imprisonment for a term which may extend to 136[one year] but which shall not be less than 142[Six months] and shall also be liable to fine which may extend to 142[five thousand rupees]: PROVIDED that the court may, for any adequate and special reasons to be recorded in the judgement, impose a sentence of imprisonment for a lesser term 143[***].] (2) 144[Subject to the provisions of the Act, the Scheme,] 133[the l48[Pension] Scheme or the Insurance Scheme] may provide that any person who contravenes, or makes default in complying with any of the provisions thereof shall be punishable with imprisonment for a term which may extend to 134[one year, or with fine which may extend to four thousand rupees, or with both].] 145 [(2A) Whoever contravenes or makes default in complying with any provision of this Act or of any condition subject to which exemption was granted under section 17 shall, if no other penalty is elsewhere provided by or under this Act for such contravention or non-compliance, be punishable with imprisonment which may extend to 146[six months, but which shall not be less than one month, and shall also be liable to fine which may extend to five thousand rupees].] 14A. Offences by companies (1) If the person committing offence under this Act, 147[the Scheme 148[, the 127 [Pension] Scheme or the Insurance Scheme]] is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: PROVIDED that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act 147[, the Scheme, 148[the 127[Pension] Scheme or the Insurance Scheme]] has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.