contribution to pension fund out of employers's share.
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contribution to pension fund out of employers's share.

de_bu2002 Started The Discussion:

Dear Sir,
I am a member of Employees Provident Fund Organisation and I want to know in details about the maximum ceiling of contribution to pension fund out of employers Share. The EPFO at Bhubaneswar are not providing any correct information relating to this critical question.

Debashis

Madhu.T.K - Member Since: Sep 2007
Employer's share to Pension Fund is limited to 8.33% of the workman's salary subject to a maximum of Rs 6500. Therefore, the monthly pension fund contribution per employee will be limited to Rs 541, ie, 8.33% of Rs 6500.

Regards,

Madhu.T.K

de_bu2002 - Member Since: Apr 2010
Dear T.K.Madhu,
Many thanks for your clarification. Here I would like to state that my monthly salary is sufficiently higherr and my office contributes 10% i.e. Rs 1655 towards my pf contribution. But the accounts section of my office deposit only Rs 541 to my pension fund and diverts balance fund to my pf account. Is it not possible to deposit more than Rs 541 in pension fund so that I can get higher pension after my retirement. I am greatly worried about this subject. In my case 8.33% of 1655 comes to RS 1378 and I want this amount to be deposited in my pension fund so that I can get higher pension after retirement. PLease offer me your valued judgement.
Debashis

de_bu2002 - Member Since: Apr 2010
Dear T.K.Madhu,

Many thanks for your clarification. Here I would like to state that my monthly salary is sufficiently higherr and my office contributes 10% i.e. Rs 1655 towards my pf contribution. But the accounts section of my office deposit only Rs 541 to my pension fund and diverts balance fund to my pf account. Is it not possible to deposit more than Rs 541 in pension fund so that I can get higher pension after my retirement. I am greatly worried about this subject. In my case 8.33% of 1655 comes to RS 1378 and I want this amount to be deposited in my pension fund so that I can get higher pension after retirement. PLease offer me your valued judgement.

Debashis

Madhu.T.K - Member Since: Sep 2007
For the time being the pension fund contribution is limited to 8.33% of Rs 6500 or Rs 541. If your contribution towards EPF is Rs 1655 and the employer is also contributing a similar sum then what is the issue/ The employer is contributing Rs 1378 to your Provident Fund along with your own contribution and that amount is also available to you in lump sum when you get superannuated. Moreover, this practice is beneficial to you when you go for advance from PF as the eligible amount of advance is decided by amount the amount to the credit of your EPF account and not clubbing both EPF and Pension Fund accounts.

In future, let us hope that the government will revise the contribution limit to pension fund.

I have one doubt, that you have mentioned that your employer's contribution is 10%; is it not 12%? 10% is applicable only to sick industries.

Regards,

Madhu.T.K

boss2966 - Member Since: Jan 2009
Dear Mr. Debashish

Good Morning

As per PF Policy the Maximum Basic Salary taken into consideration is Rs.6500/- per month. Hence Rs.541/- will be considered as 8.33% of Basic Pay from employer share. If Basic is above Rs.6500/- then the ceiling for employer contribution in 8.33% will be Rs. 541/- and the left will be added in the exployers PF Contribution.

Any other querry please contact in person.

S. Bhaskar
9908732667

abbasiti - Member Since: May 2010
Dear Bhaskar & Debashih,

It is true that we haven't experienced pension contribution in excess of ceiling limit. But I shall quote section 11(3) of EPS-95 as under

" The maximum pensionable salary shall be limited to Rupees sixthousand and five hundred per month. Provided that if at the option of the employer and employee, contribution paid on salary exceeding Rupees six thousand and five hundred per month from the date of commencement of this Scheme or from the date salary exceeds Rupees six thousand and five hundred whichever is later, and 8.33 per cent share of the employers thereof is remitted into the Pension Fund, pensionable salary shall be based on such higher salary."

Hence kindly take up the matter with the concerned Office of Regional PF Commissioner.

Abbas.P.S

abbasiti - Member Since: May 2010
Dear Riah,

12% is the contribution to PF. Even though the statutory ceiling of salary is Rs. 6500, it depend upon the employer that whether he has to contribute in excess of the ceiling limit. There is no restriction from PF authorities.

Abbas

mkk1965 - Member Since: Apr 2010
We have by mistake contributed more than Rs.541/ to pension fund for several months in this year. Now how to revise the same? Can we revise the Form 12A.

I will be very greatful if anybody could highlight me on this.

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