Opting Out of PF: What Steps Are Needed for Employees Earning Over Rs. 6500?

Dear Friends,

I would like to know whether any employee joins with a base salary of more than Rs. 6500/- per month and wishes to opt out from the P.F., not wanting to be a member of P.F. What formalities need to be done? Are there any forms available that need to be submitted to opt out? If so, what are the formalities that need to be completed?

Please guide me.

Vipul Rana

Dear Both,

Simply use Form No. 11 (exemption form), which can be downloaded from the PF site.

Regards,

Hi dear,

As per our telephonic discussion, please use Form No. 11 (exemption form), which can be downloaded from the PF site. Also, kindly do the needful as per company laws.

Thank you.

Dear Karmvir Chhillar,

A ceiling wage of 6500/- has been decided. If any employee has a basic salary of more than 6500/-, then it is not mandatory to deduct his PF. There is Form No. 11 as decided by the EPF Act of 1952 for those who do not want to deduct their PF. It is called VPF (Voluntary Provident Fund).

H Garg
Human Resource
Bawal, Japanese MNC

Most companies deduct as per their company norms. They hardly give the opportunity for the employee to decide and settle on his/her choice. VPF is good but rarely it is implemented.

Hi all,

Could you please let me know how the PF contribution can be released if the situation is as follows: I have been working at a managerial level in a private limited firm for the last 16 years and have now decided to leave on 30th September 2010. I just want to confirm whether it is possible for me to release the entire amount in my account, including what is moving to the pension fund. What is the maximum time for this process? I request you to seek feedback from any seniors.

Regards,
Vinod

Dear Friends,

Thank you for your advice. After reviewing Form-11, I found that this form is specifically for employees declaring their employment in the establishment. I did not find this form relevant for the exemption. I have enclosed the form for your review.

Going into details, I would like to know if it is compulsory for an individual to have P.F. deducted on Rs. 6500 and above, or if they can choose to be a part of it or not.

Regards,
Vipul

If you are not a member of PF in your earlier company, you can opt for an exemption for PF contribution by filling out Form 11 with your present employer. This form must be submitted by your employer to the PF commissioner.

Regards,

C.S. Deshmukh
HR Executive

Dear All,

I want to know about some little points related to PF.

1. An employee who has completed 10 years as a member of PF and leaves the job. He wants to commute his pension immediately; his age is 34 years. Is it possible? Or is it possible after the age of 60 years?

2. How much amount can he withdraw from the pension fund 8.33?

3. What is the formula for calculating the pension?

Please reply soon or by mail [Login to view].

Dear Rajiv,

Since the employee has served for 10 years, he is entitled to a pension but not before the age of 50. Currently, only the Provident Fund (PF) can be withdrawn, not the pension share.

Regards,

Hi folks,

I work for the Provident Fund organization. You may address me as 'PFwala'. I just chanced upon your queries. If you still have some queries related to EPF/EPS, please post them. I'll try to provide information or clarification as soon as possible.

Best,
PFwala

Dear Vinod,

Normally, it takes around 4 months to release the PF amount. Regarding pension, your eligibility for pension depends on two factors: one is 10 years of contribution, which, as you mentioned, is 16 years, and second, upon completion of 50 years of age. So, in case you are 50 years of age, then you are eligible to receive a pension.

Regards,
Prashant

Dear All,

Kindly tell me the meaning of Voluntary Provident Fund and exactly how its calculation works.

Regards, Kamesh OB Executive

Dear Shri Vipul Rana & Shri KK,

If you opt out of PF, you would be losing equal management contribution to your account as well as pension benefits attached to the PF. So, I suggest please reconsider your decision. You would be saving somewhere else for income tax purposes. Then why not in PF?

Sincerely, Shyam Agrawal

Dear Sir,

I am an accountant in a private limited company, and we are facing some confusion regarding the PF registration process. In our company, some employees are reluctant to register for the PF membership, which is causing difficulty in registering other employees as well. What would be the next step in this situation? Can we seek exemption for employees who do not wish to avail of the PF facility?

I am awaiting your response.

Thanks and regards,
Uday

There are no forms to be filled out to get an exemption for employees. If your salary (Basic+DA) is over 6500/- per month, you can also request your employer to exempt you from PF.

Regards,
Venkateswaran

After 16 years of service, you cannot withdraw both PF and pension fund (EPS). Only PF can be withdrawn, and the pension fund can either be transferred to another company (if you are joining another company) or you can wait until you attain 50 years of age to opt for a pension.

Regards,
K. Ramachandra
Manager-Admin & HR
Tokai Rubber Auto-Parts India, Bangalore.

As per the PF laws, the employer is required to get Form 11 duly filled in by the new employee. From the details of the said form, the employer comes to know whether the new employee is a member of PF or not. If the new employee is not a member of PF on the date of his joining and if he is drawing more than Rs. 6,500 as basic and DA, then it is not necessary to deduct PF. However, if the employee is already a member (i.e., if he has not withdrawn his PF before joining the new employment), then it is compulsory on the part of the employer to continue with his membership by deducting PF on Rs. 6,500.

Hi,

I need information on the same issue. Some of my clients (employed with company X in Delhi/NCR) have been working for the last 2-3 years. They are now doubtful whether the company is depositing the PF contribution regularly, even though it is being deducted from employees' salaries.

We have doubts because when one employee left the organization and wanted to withdraw the PF, the PF department rejected the form, stating that they do not have a record of the contribution from the employer. Is this not a crime? Deducting PF and not depositing it with the authorities.

What action can be taken by the ex-employee? What can current employees do to safeguard their money and avoid being cheated? Whom should they approach regarding this issue? Since the company is not providing the information, what steps can be taken?

Regards,
for

Hi,

Could somebody guide me on which option should be chosen in Form 11 if the person is not opting for PF? If a person does not want to opt for PF, does the company have legal implications for it? Is a PPF account a better option if someone wants to quit from PF?

Regards,
Neha
Sr. Executive-HR
Allied Lemuir

Hi TM,

The answer to your question is:
1. Check PF challan and monthly return from accounts/HR. You will get to know whether that PF has been deposited or not.
2. If it's not been done, that means your employer is not depositing the money in PF. You can take legal action against your employer as it is a crime.

Regards,
Neha

Dear Members,

Just follow PF rules, it is compulsory to deduct PF up to basic + DA (if any) of 6500/- per month. Employers need to deduct PF for any employee up to 6500/-, anything more than that is optional. However, once it is deducted, neither the employer nor the employee can withdraw or stop it.

To confirm whether PF contributions have been deposited or not, there are many ways to verify it. Firstly, ask your employer to provide your individual PF account number. Secondly, ask for the PF slip, which is issued by the PF department annually to employees whose PF is being deducted. Thirdly, confirm with the bank where the deposit challans are being submitted. Lastly, for further clarity, approach the PRO at the PF office.

Regards,

Dear Vipul,

You will find the provision of exemption from EPF under Para 2 (f) of the Employees' P.F. Funds Scheme, 1952. However, it is important to note that only new entrants whose basic salary or wages (basic + DA) exceed Rs. 6500 can benefit from this provision. Old employees who are EPF members and exceed the Rs. 6500 salary limit due to increments should not be excluded from the scope of the act; they will remain members, and PF deductions will be based on the ceiling of Rs. 6500. Additionally, those who have withdrawn their PF upon reaching the age of superannuation or older than 55 also qualify for the exemption. Form 11 is typically used for previous EPF/EPS details and not for exemption purposes.

Hope you understand the provisions.

Regards,
KIRAN KALE.

Form 11 is a declaration form in which details are provided about the previous P.F. number, indicating whether the employee was a member of P.F. in previous companies. If the employee was part of P.F., it is obligatory for the present employer to deduct the P.F. of the same employee up to Rs. 6,500, even if the basic salary exceeds Rs. 6,500.

Form 26 (6) is filled out by employees whose basic salary is more than Rs. 6,500, and acceptance is given by the employer on the same form. In this case, the employee can benefit from P.F. contributions, but the employer is only liable to contribute up to Rs. 6,500, not more than that.

Rajiv Singh

Dear Friend,

Pension under Employees' Pension Scheme, 1995 becomes payable after a minimum of 10 years of membership (you comply with this provision) and after the completion of 58 years of age. For each year short of 58, there is a reduction of pension. Before the age of 58, one is eligible for reduced pension. Your age being too short, i.e., 34 years, I wonder whether you will receive a handsome pension. If you have changed your job from one employer to another, you may continue the same PF account and the same Pension account. If you are determined not to do another job and leave the service forever to engage in some business, then you may apply for reduced pension in consultation with the PF office.

Sincerely,

Shyam Agrawal