Navigating PF and ESI Rules: What Employers Need to Know for Employees Over 58

Dear all,

Query about PF & ESI age limits

1. If an employee attains 58 years of age, what procedure should be followed from the employer's side?

2. In case a person works at a company until 67 years of age, is it mandatory for the employer to contribute to PF? Also, if the company decides to stop PF contributions, what should be done from the employer's side?

3. What are the rules regarding the ESI age limit?

Thanks & Regards,
S. Praveen

Dear Colleague,

EPF Pension

EPF Pension, technically known as the Employees' Pension Scheme (EPS), is a social security scheme provided by the Employees' Provident Fund Organization (EPFO). The scheme makes provisions for employees working in the organized sector for a pension after their retirement at the age of 58 years.

According to EPFO guidelines, an employee shall cease to be a member of the Pension Fund from the date of attaining 58 years of age or from the date of vesting admissible benefits under the scheme, whichever is earlier. However, in cases of continuation of service, the employer needs to pay the Employees’ Provident Fund Contribution until the date of his or her leaving the service, irrespective of the age of the member. Overall, your contribution can continue if you are a full-time employee.

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ESI

ESI Contribution is to be continued until the date of leaving service provided the wages are up to 21,000/-. An insured person who superannuates or retires under a Voluntary Retirement Scheme or takes premature retirement, after being an insured person for not less than 5 years, shall be eligible to receive medical benefits for himself and his spouse subject to production of proof thereof, and payment of a nominal contribution of rupees one hundred and twenty for one year. In case the insured person expires, his spouse shall continue to receive medical benefits under Rule 61 on payment of contribution as mentioned above.

All the Best, God Bless
Dr. P. SIVAKUMAR
Doctor Siva Global HR
Tamil Nadu

Thank you for providing me with information. I have an additional query regarding employees who are above 58 years of age. At that time, how should the employer prepare the challan? Should we prepare the challan for EPF 3.67%, EPS 8.33%, EDLI 0.5%, and admin charge 0.5% from the employer's side, or should we only prepare for EPF 12% and other charges? What is the correct procedure?

Thanks & Regards,
S. Praveen

Employer and Employee Contributions to PF

As you also know, the contribution of 12% from both the employer and the employee is mandatory, and applicable administrative charges are also applicable.

While the entire share of the employee is contributed towards EPF, 8.33% of the employer’s share goes towards EPS. The scheme acts as a regular source of income after the employee retires. In the present scenario, you may consult the PF Enforcement Officer for more clarity, but to my knowledge, we should not reduce the contribution. The entire 12% of the employer's share has to go to PF for this employee. This is what we used to do in the past in several organizations.

Take care,

Regards, Dr. P. SIVAKUMAR Doctor Siva Global HR Tamil Nadu