Provident Fund Dilemma: Is Registration Mandatory or Can We Opt for Voluntary Schemes?

Provident Fund Registration: Mandatory or Voluntary?

Provident Fund registration is a must. Can we register with Max, LIC, or Aviva schemes for our employees? What are voluntary schemes, and how are they different from the Government standard PF scheme? Please help.

Thanks,
Partha

Once your establishment has more than 20 employees and falls under the schedule of employment covered by the PF Act, you have no option but to cover your establishment under the PF Act. There is no alternative to the PF Act; you cannot cover your establishment with LIC or any other life insurance as these schemes don't provide all the benefits extended by the PF Act.

You can at most approach the PF Dept. voluntarily (if you have fewer than 20 employees) and request them to cover your establishment. They will be happy to cover your establishment. Another option is to wait until your establishment has 20 or more employees and then approach the PF Dept. for coverage. This is because sometimes by the time the PF Dept. covers your establishment, the strength exceeds 20, and the concerned PF inspector may cover the establishment from a retrospective date.

At such times, the employer has to bear an unnecessary burden.

Regards

Thank you, Sunil. I need another clarification. Ours is a high-end design organization, and the average salary per person is more than 1 lakh per month. We were told that if the salary is high like this, then PF is an optional contribution and not mandatory.

Please advise.

Thanks

All acts related to employees are to safeguard their benefits and interests. If an employer can provide benefits at par or more than that, then no officer will have any objection as employees are benefited.

If your employees' salary (basic + DA + cash value of food concession) is more than Rs. 6500, then it's not mandatory for employees or employers to contribute to the EPF fund. In this case, mutual consent of employer and employees to contribute to the fund or not can be exempted.

I would like to have expert comments in this regard.

Regards,
Shaikh

I agree fully with Mr. Shaikh. However, PF is a social security measure. Even though you and your employer are exempted from the coverage of the act, if both of you mutually decide to contribute to the extent of a salary of Rs. 6500/- per month (and not more), both will benefit. Both will benefit under the Income Tax Act for the amounts contributed during the financial year. The employee will benefit by way of a lump sum PF contribution at the age of superannuation + Pension. Another option is to let your employer contribute to the extent of Rs. 6500/- per month (Basic+DA) or (consolidated basic), and you as the employer contribute your share of PF based on your actual basic (which may be more than Rs. 6500/-). The PF Act is, in fact, a beneficial provision for employees and employers. THE CHOICE IS YOURS.

As per the new campaign of enrolling employees who have been left unenrolled under the EPFO Act, I would like to ask whether an organization has to obtain registration under the PF Act first or if it can be obtained later.

Hi,

I am working in an old organization that was started in the year 2010. I am handling all HR responsibilities, but I recently found out that the company has lost the original copy of the PF registration. If anyone knows how to obtain a duplicate copy, please let me know as it would be very useful to me.

Thanks