Navigating Employee Benefits: Should We Adjust EPF Contributions After Age 58?

Respected seniors, if an employee continues in service even after reaching the age of 58, should we continue to pay both contributions, duly transferring the pension fund contribution to the PF contribution, or should we relieve him from service and reappoint him as a consultant? Respected seniors, which is the right procedure? Kindly provide your advice.

With regards,
V. Ramabrahmam

After completing 58 years, an employee can continue his job as a consultant.

Regards,
Sandhya

When a person works after the age of 58, they will be designated as an Advisor or Consultant, etc. The tax will be at a 10% slab, irrespective of the amount paid.

Regards,
Karthik

Yes, I agree with Mr. Prasad. You have to pay 12% on both shares. You can submit Form 10C papers to apply for a pension while still in service.

Thanks with regards,

S. Ganapathy

You have to transfer the person from On Roll to Off Roll/Consultant, or you can also keep him on a Retainership Agreement after making his Full and Final settlement.

The retirement age is defined by the company. Normally, the state and central government declare the retirement age as 58/60 years. It may change as per the government's decision.

Based on the age and terms and conditions of appointment, retirement is determined. Once the retirement age is attained, employment ceases on the day of completion of 58/60 years. All the benefits normally applicable to full-time permanent employees are not applicable upon retirement, i.e., PF, gratuity, bonus, etc.

Such retiring employees may be retained by the company and their services utilized on a contract basis or as a consultant for a specific period where they would be considered an employee of the company.

EPF Contribution After Age 58

EPF contribution is purely optional after the member has attained the age of retirement at 58 years. In the case of new employees joining after they have attained 58 years, they will be exempted employees under the EPF Act, and hence no contribution is payable. However, they can join the EPF (not the pension scheme) if the employer is also in favor of it.

Regards,
Sanu Soman
Chennai

Retirement Age Compliance and PF Contributions

Retirement age should be in compliance with the terms and conditions stipulated in the appointment order, Standing Order, Company policy, etc. If the retirement age stipulated as above is 60 years, how can you expel him from service before? As long as he continues in service, PF is applicable.

However, after attaining the age of 58 years, no remittance should be made to the pension fund; instead, the full contribution has to be paid to the PF account. Even if the retirement age is 58 years, there may be a non-contributory period with regards to the Pension Fund. For example, if the date of birth is 2.1.1961, the completion of 58 years will be on 1.1.2019. At the same time, the retirement date will be 31.1.2019. For the period 2.1.2019 to 31.1.2019, no contribution is to be paid to the Pension Fund. Instead, he can avail both pension and salary for the said period. Accordingly, the entire contribution has to be remitted to the PF account.

Regards,
Abbas.P.S

The employee can continue in service after 58 years either as an employee for a specific period or as a consultant. In such a case, the management is at liberty to exempt the employee from PF contribution. If the management chooses to contribute, they must remit both the employer and employee contributions to the Employees' PF Account only. Pension contribution should not be included.

Regards,
D. Gurumurthy