Employee Turns 58: Should We Still Deduct PF Contributions According to the Law?

One of the employees in my company has completed 58 years. According to the PF Act, should deductions towards PF contributions continue until he works in our company?

Under PF Law, there is no age of retirement. This means you can deduct the PF until the employee is working for you, even after the age of 58/60. However, upon reaching the age of 58, you must stop the contribution towards the Pension and contribute the entire amount of the employer's share to the PF account.

At 58, when you cease the contribution to the Pension, you should indicate in the ECR that the member has superannuated with the date and divert the entire contribution of your share to the PF account.

Please advise the member to submit Pension Form 10C through you if the pensionable service is less than 10 years; otherwise, submit Form 10D.

Thank you.

To add to what Keshav has said, if the said employee chooses to withdraw his PF accumulations along with applying for a pension, he can be excluded from PF contributions for the rest of his service with the company. As far as possible, and to reduce the cost to the company, it is desirable to have a separate appointment for the period after the date of superannuation. With this approach, he can withdraw the PF accumulations, receive the pension, and thereby become an excluded employee in respect of whom no provident fund liability arises.

Regards,
Madhu.T.K

In the Employees' Provident Fund Scheme 1952, there is no age bar for participation. However, employees are not required to divert their share of pension contributions to the pension fund.

Provision in the Employees' Pension Scheme 1995

The provision outlined in paragraph 6A of the Employees' Pension Scheme 1995 restricts membership in the Pension Scheme until reaching the age of 58 years.

Regards,
Santosh

Is it legally right to do so? If a person is re-employed with the same employer on the very next day after his superannuation, can we keep him out of PF contributions? Is it fair to deprive any person of such social security to which he is entitled just to reduce the employer's costs?

With due respect to you, Sir, I would not recommend this.

I too do not want to follow it. However, in practice, this cannot be denied because superannuation is not just a paper arrangement. If a fresh appointment is given, he can very well be deemed an excluded employee on the grounds that he is in receipt of a PF Pension.

Regards,
Madhu.T.K

In the Employee's Provident Fund Scheme 1952, there is no age bar for participation. However, there is no requirement to divert one's share of pension contribution to the pension fund. The provision contained in para 6A of the Employee's Pension Scheme 1995 restricts membership in the Pension Scheme until reaching the age of 58 years.

The contribution to EPS is to be ceased on the date of completion of 58 years. From the day following the completion of 58 years, the member is entitled to receive both salary and pension. For example, if retirement is at 58 and the date of birth is on the 2nd of a month, then the date of completion of 58 years is the 1st day of the month. The member is eligible to receive pension for the remaining days of that month.

Regards,
Santosh Abbas.P.S

If the person ceases EPS contributions upon reaching the age of 57, the employer must inform the RPFO and prepare Form 10C for submission. Upon turning 58, the individual may start receiving a pension if eligible. If the employer wishes to retain the employee, they can continue deducting PF contributions but not the pension fund. Alternatively, the employer can retain the employee with the designation of "RETAINER," in which case TDS must be deducted from the monthly remuneration, as the individual is considered an 'exempted employee.'

Regards,
PBS KUMAR