Is It Ethical for Employers to Split PF Contributions into PF and Pension? Seeking Guidance

Dear Seniors, kindly help. Is it ethical if an organization bifurcates the Employer's PF contribution into Employer PF & Pension Contribution? From what I have understood, EPF & EPS should be separate entities. Kindly correct me if I'm wrong.

Awaiting replies.
Regards.

Please note that the PF will be of two types: (1) Employee PF 12% and (2) Employer PF 12%. The Employer PF will be further bifurcated into two categories, i.e., Employer PF 3.67% and Employees' Pension Scheme 8.33%. In addition to this, the Employer will have to pay an additional 1.61% for Admin charges PF (1.1%), EDLI (0.5%), and EDLI Admin Charges (0.01%). Hence, the total PF will amount to 25.61%. 12% will be borne by the Employee, and 13.61% will be from the Employer.

I hope your doubt has been cleared. If you have any further doubts, do not hesitate to seek clarification.

In addition to Mr. Bhaskar's clear reply, please note the extra 1.61% in no way comes into the account of the Employee PF or pension account. Those are government charges that go to various accounts of the Provident Fund. Hence, as long as the employee is concerned, PF will be 12% of Employee Contribution + 3.67% of Employer Contribution. The rest 8.33% of Employer Contribution goes to the Pension Scheme of the employee.

Here again, some companies may be deducting more PF amount (more than the specified limit of 6500/-). In which case, a maximum of Rs. 541/- only goes to the Pension Scheme. The rest will go to the Employee PF Account.

Regards,
Sundararaman

Clarification on PF and Pension Contributions

In addition to Mr. Bhaskar's clear reply, please note the extra 1.61% in no way comes into the account of the Employee PF or Pension Account. These are government charges that go to various accounts of the Provident Fund. Hence, as far as the employee is concerned, PF will be 12% of the Employee Contribution + 3.67% of the Employer Contribution. The remaining 8.33% of the Employer Contribution goes to the Pension Scheme of the employee.

Here again, some companies may be deducting more PF amount (more than the specified limit of ₹6,500). In such cases, a maximum of ₹541 only goes to the Pension Scheme. The rest will go to the Employee PF Account.

Regards,
Sundararaman

It is correct that the above-referred 1.61% will not come to either the employee's PF account or Pension Account. However, out of this, 0.5% is towards EDLI. The nominees of the members who die while in service will get the benefit of the scheme.

Abbas.P.S

Sub-P.F Query

In terms of Para 57 of the P.F. Scheme 1952, you have to apply in Form-13 to the P.F. Commissioner within whose jurisdiction your previous establishment falls for the transfer of your EPF amount from the previous account to the account in the present company.

Regards,
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
Tel: [Phone Number Removed For Privacy Reasons]

Thank you for your replies and for clearing my queries. I would also like to wish you all a very happy and prosperous New Year in advance. :))