Retirement Age in Noida/UP: Can We Rehire Retirees and Handle PF Contributions?

Dear there, I would like to know if there is a standard or common practice for the retirement age in Noida/UP (non-manufacturing company). Can we still hire the employee after his/her retirement? And how about the monthly PF contribution?

Thank you very much.

Regards, Ashia

Retirement Age and PF Contributions

The retirement age depends on the company policy. The policy regarding the engagement of retired employees also depends on the respective establishment. The only thing to be noted is that if the employee is serving even after the retirement age fixed under the Pension Scheme of Provident Fund, i.e., 58 years, the contribution payable by the employer, i.e., 12%, shall be paid only to the PF account without bifurcating it as 8.33% to the Pension Fund and the remaining 3.67% to PF.

If an employee aged above 58 is hired, you should follow the same principle. However, if an employee who has already withdrawn his PF accumulations and is getting a PF pension is hired, you can declare him as an excluded employee, and there is no need to pay it. Retired government servants, those retired from the Indian Railways, etc., who are getting a pension but not a pension from the EPFO, are to be covered if they are given employment in your establishment. In their case also, the contribution payable by the employer should not be bifurcated, but the entire 12% should be paid to PF only.

In the Noida area, I believe most companies have a retirement age of 60 years. This is typically applicable to large factories with established processes and certified standing orders. For smaller SMEs, the retirement age would be determined based on how they value each individual employee. Therefore, I don't think this question can be answered definitively.

Dear Sir, Madhu.T.K, Thank you for your valuable information! One thing I have a query about is regarding "an employee who has already withdrawn his PF accumulations" — is the PF accumulations referring to the PF account balance? And when you mention "getting PF pension," are you referring to receiving the PF pension amount from the Pension account? Appreciate the help!

Best Regards, Ashia

Dear Sir, Saswata, thank you for the inputs! For SMEs, can we decide on a different retirement age for different persons, or should we set a fixed rule for all employees?

Best Regards,
Ashia

"An employee who has already withdrawn his PF accumulations" means withdrawal of PF accumulations upon attaining the age of 58 and partial withdrawal for any reason. A person receiving a PF pension is a member of the provident fund receiving a pension from the EPFO after reaching the age of 58.

Please let me know if you need any further clarification.

Ashia, if you are not under Standing Orders (which applies to an establishment that has 50 or more employees), you are free to set your retirement age. If you are under Standing Orders, then you need to follow the Model Standing Orders (or your own Certified Standing Orders).

Internal Decision vs. PF Impact
The above is an internal decision. The impact of PF, as explained above, is different and independent of this decision as such. You can have a different age in PF and in your internal processes.

Guys, I am working in a Co-op Credit Society Ltd. Now, my organization wants to amend two different retirement policies: one at age 60 for all employees and another at age 63 for the Managing Director and Operations Manager. I am confused about whether it is possible to do so without creating issues among those who are retiring at the age of 60. Please provide a legal opinion, if possible, regarding Labour Law.