The Employees' Provident Fund (EPF) - External website that opens in a new window is one of the most beneficial and popular investment scheme for the salaried persons in India. The Employees'' Provident Fund Organisation - External website that opens in a new window , a statutory body under the Ministry of Labour and Employment - External website that opens in a new window , Government of India administers social security schemes framed under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 (310 KB) - PDF file that opens in a new window namely Provident Fund, Pension and Insurance to industrial employees. The PF account benefits are extended to all the establishments which employ 20 or more persons.
The EPFO - External website that opens in a new window offers many online services through its portal to members. This way the services are delivered transparently, efficiently and comfortably to everyone. Recently a new online service was launched to facilitate members transfer their PF account online - External website that opens in a new window from one organization to the other. Now if an employee changes his job he can easily apply to transfer his PF account through an easy online process if the EPF & MP Act 1952 applies on both the establishments. The PF account transfer service - External website that opens in a new window is also available for employers. Both the employees (525 KB) - PDF file that opens in a new window and employers (633 KB) - PDF file that opens in a new window must read the guidelines before they apply for their account transfer claims. Many essential PF services are already made available online to members by the EPFO and new initiatives are being taken to make the process easier for a large number of employees working in both the public as well as private sectors.
The EPF is one of the main platforms of savings for all employees working in Government, Public or Private sector Organizations. It came into existence with the promulgation of the Employees' Provident Funds Ordinance on the 15th November, 1951. It was replaced by the Employees' Provident Funds Act, 1952. It is now referred as the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 which extends to the whole of Indian except Jammu and Kashmir. The Employees' Provident Funds Bill was introduced in the Parliament as Bill Number 15 of the year 1952 as a Bill to provide for the institution of provident funds for employees in factories and other establishments. Since its enactment in 1952, the Act has been amended 15 times till now.
Who can become EPF Member?
All employees are eligible to become a member of provident Fund from the date of joining the establishment. On becoming a member, an employee is eligible for provident Fund benefits, pension benefits and Insurance benefits. Every employee at the time of joining the PF Scheme should execute a nomination.
A member can also register himself/herself on the Member Portal - External website that opens in a new window and download his/her e-passbook having transaction wise details in PF Account. You can also Get Help (467 KB) - PDF file that opens in a new window to find how to use this service.
Employer and Employee Contribution
A provident fund is created with a purpose of providing financial security and stability to employees. A person starts his contribution in the PF fund once he joins a company as an employee. The contributions are made on a regular basis. The primary purpose of PF fund is to help employees save a fraction of their salary every month so that he can use the same in an event that the employee is temporarily or no longer fit to work or at retirement.
Employers and employees both contribute @12% of wages in contribution accounts. Further, the employers also contribute towards administration of the benefits under the EPF & MP Act.
| CONTRIBUTION ACCOUNTS | ADMINISTRATION ACCOUNTS | Total | ||||
|---|---|---|---|---|---|---|
| EPF | EPS | EDLI | EPF | EDLI | ||
| EMPLOYEE | 12 | 0 | 0 | 0 | 0 | 12 |
| EMPLOYER | 3.67 | 8.33 | 0.5 | 1.10 | 0.01 | 13.61 |
| TOTAL | 15.67 | 8.33 | 0.5 | 1.10 | 0.01 | 25.61 |
The rate of contribution for certain category of establishments is 10%. These are:-
The contributions are invested as per the prescribed Pattern of Investment. The Members' Provident Fund Balances earn interest as per the rate of interest (391 KB) - PDF file that opens in a new window declared annually by the Government of India - External website that opens in a new window .
Benefits to employees under EPF Scheme
Employee Provident Fund is a very important investment for the necessities of our future. The tax free interest and the maturity award ensure a very good growth to your money. If the PF money continued for a very long period of time, it can help in meeting employee's requirements including his retirement goals.
We often fall short of funds during emergencies and at those moments borrowing is the only option left. At this time the EPF can be very helpful because the kinds of benefits it provides no other investment can offer the similar remunerations: The PF can be used for multiple purposes at different moments as it guarantees benefits such as:
Any person joining an establishment, to which the EPF & MP Act applies, shall compulsorily submit a declaration to his/her employer, whether he/she is already a member of Provident Fund (Form 11 (15.1 KB) - PDF file that opens in a new window ). This will ensure continuity of service and consequential benefits.
In case he/she was a member he/she shall also apply in Form 13 (1.3 MB) - PDF file that opens in a new window for getting the old account details and the fund balance to the new account.
Online EPFO Services
The EPFO is providing number of online services to the employees. It includes account balance enquiry, claim status check, transfer facility etc.
Account Transfer Claim Portal
The EPFO has recently launched a new system to facilitate online PF account transfer by members with an objective to make the transfer process hassle free, transparent, and efficient for one and all.
Balance Enquiry and Claim
Employees can check the status of their claims online - Know Your Claim Status - External website that opens in a new window Members can check their PF account balance online. You will be asked to provide certain information such as your name, mobile number, etc. The given mobile number will be recorded along with the PF account number. Once you successfully submit the form, your PF account balance details will be sent through SMS to the given mobile number.
Online Passbook
A member can also register himself/herself on the Member Portal - External website that opens in a new window and download his/her e-passbook having transaction wise details in PF Account. You can also Get Help (467 KB) - PDF file that opens in a new window to find how to use this service.
The EPFO also offers multiple online services - External website that opens in a new window to employers as well. Employers can access various PF related services on the portal such as transfer of accounts, submission of ECR/Challan, establishment search, etc.
Employers can check whether the remittances made by them has reflected in the list of payments and whether the member pass book against any ECR has been made available. If yes, it will be available for download on login to the employer portal.
Establishment Search - External website that opens in a new window - (You can also view Remittances and member name)- Get Help (502 KB) - PDF file that opens in a new window on How to use this service.
Recovery of damages for default in payment
If an employer makes default in the payment of any contribution to the Employees' Pension Fund, or in the payment of any charges payable under any other provisions of the Act or the Scheme, the Central Provident Fund Commissioner or such officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf, may recover from the employer by way of penalty, damages at the rates given below:
| Period of Default | Rates of damages (Percentage of arrears per annum) |
|---|---|
| Less than 2 months | 5% |
| Two months and above but less than four months | 10% |
| Four months and above but less than six months | 15% |
| Six months and above | 25% |
Registration of Complaints
In case your establishment has not contributed into your provident funds or committed a default on payment you can file an online complaint for this. You just need fill up an online form and provide details of your establishments and other particulars of your complaint to submit it online. Members can also check the status of their registered complaints and send reminder on their complaints to the EPFO.
Classes of Industries under EPF scheme
As on date, the EPF & MP Act extends to 187 classes of establishments - External website that opens in a new window . Any establishment falling in any of the 187 categories mentioned above and employing more than 19 persons automatically comes under the purview of the EPF & MP Act 1952.
Provident Fund - Avoid early withdrawal
EPF also offers other benefits like using funds for equipment purchase in case of differently-abled and natural calamity damages, etc. which an employee can use at the time of need. A member also has an option to nominate family members to receive funds after his demise and should be aware that withdrawing funds after job change is legal only when you are jobless for at least two months. The primary goal of EPF is long term investment and it should be used only when it is the last option available for an employee.
