Industrial Relations And Labour Laws
Hr & Administration
Epf & Esi Matters
Service As Dgm-hr/legal
Payroll And Labour Law Consultancy
Sr. Process Executive
Provident Fund can be withdrawn when an employee leaves the organisation or on his attaining the age of 58. Pension fund can be withdrawn subject to conditions if the employee has not put in 10 years of service. If he has put in more than 10 years (or at least 9 years and 6 months) he cannot withdraw this fund but will be eligible to get pension on attaining 58 years of age. Reduced pension is also available after 50 years of age.
7th November 2012 From India, Kannur
Employer Share of 8.33% is deposited in EPS (Pension Fund)
PF Account Slip does not include EPS Fund amount.
Hope this resolves your query.
7th November 2012 From India, Thana
As indicated by Mr.Madhu EPF/ PF contributions are only reflected in the Form 23 and it is maintained by the respective PF offices in the member's account individually. You can simulate this to a savings bank account account held in a Financial institution.
However, unlike the EPF/ PF the pension contribution of 8.33% is maintained as a corpus fund and is not maintained against the member's account. You can simulate this to income tax remittance to the Government of India. You do not get any returns from IT (only refunds if any), but in case of Pension fund the member gets Pension on attaining superannuation if the member is alive or if the member is dead, his nominee gets the benefit.
The employee can choose to withdraw the amount contributed by him to the Pension fund (Corpus) by submitting Form 10C when he joins a new establishment which does not have PF coverage. However, if the employee has completed 10 years of service then he does not have the option of withdrawing the amount from the Pension fund. The PF office gives a Scheme certificate that contains relevant particulars relating to the period of service. This certificate can be produced by the member in the event he joins an establishment subsequently that extends PF coverage or if he continues to serve in an establishment that does not extend PF coverage then he has the option to surrender the scheme certificate to the PF office and opt for Pension once he attains superannuation (58 Years). He may also opt for Pension after attaining 50 years, but the Pension amount will be reduced proportionately.
The Pension calculation is made based on the last drawn service/ 70 X Number of years of completed service. In case the employee possesses a scheme certificate then the service indicated in the scheme certificate is added to the service rendered by the employee in the subsequent establishment (where he was covered under PF) and then the pension amount is worked out.
At the time of settling the Pension account the member is given the option to opt for return of capital (a lumpsum amount is paid) and the remaining is paid as pension to the employee. If he does not exercise the option then pension amount due to him is calculated and paid.
In case of employees who have been member of PF prior to 15th November 1996, the pension is calculated in two folds. One prior to 15th November 1996 and the other after this date as per calculation indicated above. This is because the Pension rules were amended on that date.
Trust the matter is clear
8th November 2012 From India, Madras
The government of India had issued a Gazette notification (GSR Nos. 688 (E) dated September 26, 2008) incorporating several amendments they are:
1. Amendment to Para 12 (7).
2. Deletion of Para 12 A.
3. Deletion of Para 13.
These amendments have far reaching consequences by way of substantially altering the benefit package of the EPS ’95 to the detriment of the interests of workers.
The first amendment to Para 12 (7) has increased the rate by which the amount of pension is to be reduced in the case of early pension (availed by those who have completed 50 years of age but are below the age of 58) from 3 per cent to 4 per cent. This will result in immediate reduction in the quantum of pension.
If, for example, the eligible pension on completing 58 years of age is Rs 1000 per month and the employee has to exit the job on completion of 50 years of age, either due to resignation, retrenchment, illness or otherwise, he would get an early pension applying a reduction of 3 per cent per year i.e. 24 per cent reduced from the monthly pension and would get Rs 760 per month. This reduction rate has now been enhanced to 4 per cent and in this case the reduction would be 32 per cent or the monthly pension would be Rs 680 only.
The second amendment (deletion of Para 12 A) is altogether eliminating the option available at present for commutation of pension. The existing provision enables a member to commute up to a maximum of one-third of his pension so as to receive hundred times the monthly pension. This facility was made available after three years of commencement of the Pension Scheme i.e. from November 16, 1998 onwards.
If, for example, the eligible pension is Rs 1000 per month and the pensioner opts to commute one-third of his monthly pension the commuted value will be equal to 1/3 x 1000 x 100 = Rs 33,333 and the same will be paid at the time of exercise of option for commutation. The balance pension payable on monthly basis will be Rs 667.
This option for commutation stands totally abolished now with this amendment. The pensioner is thus denied the opportunity to commute one-third of his monthly pension and avail a lump sum amount to meet exigencies like marriage in the family, death of kin, medical expenses etc. The concept of commutation is a universal component of any pension scheme and this has been done away with arbitrarily.
The third amendment (deletion of Para 13) eliminates the existing option available to a member eligible for pension to draw reduced pension and avail a return of capital under any of the three alternatives provided. Unlike the option for commutation, the option for return of capital must be exercised at the time of applying for pension itself.
The three alternatives available were:
i. A pensioner during his lifetime can opt to avail a revised pension of 90 per cent of original pension with return of capital equal to 100 times the original monthly pension payable to the nominee on death of the member.
ii. A pensioner during his lifetime can opt to avail a revised pension of 90 per cent of original monthly pension; the widow of the pensioner can opt to avail a revised pension of 80 per cent of original monthly pension on the death of her husband; the nominee of the pensioner can also exercise this option on the remarriage of the widow; In these case the return of capital will be equal to 90 times the original monthly pension.
iii. A pensioner can opt to avail a fixed pension for a period of 20 years notwithstanding whether the member lives for that period or not. Under this option the member can avail a 87.5 per cent of original monthly pension for 20 years and at the end of 20 years, avail return of capital equal to 100 times the original monthly pension.
All these three alternative options for availing return of capital have now been totally eliminated with these amendments.
12th November 2012 From India, Delhi
I know I am reviving a really old thread here, and hope I can still get a response.
If as mentioned by Manasi, the below is true
"Employee share of 12% and Employer Share of 3.67% is deposited in EPF (Provident Fund)
Employer Share of 8.33% is deposited in EPS (Pension Fund)
PF Account Slip does not include EPS Fund amount."
Then what proof do we hold that the organization has actually been depositing 8.33% of the overall 12% into the EPS (Employee Pension Fund)?
Is there some sort of documentation that we should request from the organization in order to understand whether this is being done?
18th December 2014 From United States
#AnonymousI left my previous company in India 7 months ago and now I am working in gulf country since 5 months, I have UAN number but no adhar card, pls guide me how I withdraw my pf
23rd February 2017 From Saudi Arabia, Jeddah
>>If we talk about PPF (Public Provident Fund) then its a kind of account that is offered by Banks and financial institutions. On the other hand PF or EPF is the facility that is benefited by your employer.
>>The minimum amount to open PPF account is Rs.500, while EPF account will be opened by your employer when your salary is below Rs. 15,000.
>>It should be noted that, a time ago, EPF account was not mandated for individuals whose salary is 15k or below 15k, but from saving perspective govt made it mandatory.
>>In PPF the deposit is same as EPF (on monthly basis), the only difference the amount will not be deducted from your salary. You will need out to pay it on your own.
>>In EPF a stipulated amount id deducted from employee's salary and it then added to your EPF account which you can withdrawal at least 10 years later. This amount is decided by the government.
There are numbers of things that define the Employee Provident Fund, even these all can not be described here because EPF is a very large field of investment in itself. If you want to know more about EPF, you may read this: https://www.bajajfinserv.in/insights...know-about-epf
19th December 2018 From India
1- 12% of the basic salary + DA + RA
2- 3.67% by your employer
3- 8.33% in EPS (Employees' Pension Scheme)
4- 0.5% in EDLI (Employees Deposit Linked Insurance Scheme)
5- 0.1% as EDLI charges
6- 0.65% Administrative Charges
You may read more about employer contribution to pf in detail at: https://www.bajajfinserv.in/insights...f-contribution
17th January 2019 From India