Can We Skip PF Deductions for a Retired Employee Now Working as a Contractor?

I am working in a company as an Officer P&A, and I want to know, "If an employee has completed his 58 years (retirement age) and now we want to continue him as a contractor labor, is it compulsory to deduct his PF amount from his wages?" If yes, then please provide the section or rule under which this act comes.

Dear Mr. Rahul Johari, What is your practice on contract labor with an age below 58 years? It should be continued because nowhere in the EPF & MP Act, 1952, is the age of 58 years mentioned, except in EPS-95. Hence, provision is required not for continuation, but for cessation.

Regards,
Abbas. P. S.

Dear Abbas.P.S Sir,

A very Good Morning.

Sir, you said that PF deduction should be continued if we hire them again on a retainer ship/contract basis. However, I have heard that if someone completes his/her 58 years of age (retirement age) and withdraws his whole PF amount, then it's not mandatory.

Could you please highlight whether this is a correct statement or not?

R. Johari

Dear Rahul,

No PF should be deducted after the age of 58. So, if the employee is retained by the company after the retirement age, keep him on a contract basis and pay him a salary as professional charges.

Hope this will help.

Chetan

There is no specific retirement age for relieving from EPF. If the service continues after 58 years, PF contributions also need to be continued.

Abbas.P.S

Dear PSD Sir,

Which provision/section of the EPF Act provides the liberty that the employer is free from the ambit of PF coverage and can hire any person above the age of 58 years? No provision is inserted for such. According to my opinion and understanding, PF will be covered while EPS contribution will be prohibited.

Kindly confirm and suggest.

Regards

Dear Sir,

Please help to confirm the following:

1. Will the EPF & EPS contributions be deducted from both the employee and employer and paid to the department for an employee who has completed 58 years of age and is still in service?

2. If he wishes to voluntarily contribute, is it possible, and what will be the process?

Regards,
Radha M S
9901841800

Members can contribute under the Pension Scheme until attaining the age of 60 years. Therefore, you can continue his membership until he reaches the age of 60. If he remains in continuing employment thereafter, pension contributions will be added to his PF account. In other words, he will only be a member of the PF. There is no age limit for PF membership as long as the employee is receiving a salary and not professional or consultation fees.

Please find the Pension Notification attached for the benefit of all.

Regards,
Suresh

One of our continuing employees has completed 58 years. Now, he wants to withdraw his pension fund. My question is:

Should I create and upload a separate ECR for the above 58-year-old employee or combine it with below 58 years of age employees?

What is the process followed by the employer to release his pension amount?

There is no age limit for PF membership as long as the employee is receiving a salary and not professional or consultation fees. You can continue his PF membership with the same PF number, and no separate ECR needs to be generated. If he withdraws his pension after attaining the age of 60 years, he will get an additional 4% benefit.

Regards, Suresh

Dear Saswata Banerjee, please find attached herewith the EPFO Pension Notification and Gazette Notification for your reference.

Thanks & Regards,

Suresh