2. What is a Provident Fund ?
The EPF is created by the Employees Provident Fund
Organization (EPFO) of India, a statutory body of the
Indian Government under the Labour and Employment
Ministry . It is a mandatory, tax-qualified, defined,
contribution retrial benefit plan wherein equal
contribution at the specified rate is made by the employer
and the employee. This investment made by millions of
employees across India are pooled together and invested
by a trust.
3. You, as your own, can not become an EPF Member. To become an
EPF member, you have to work in an establishment which is
covered under EPF and MP ACT, 1952.
• If 20 or more employees are working in an establishment, EPFO
will cover that establishment.
• If Employer and Employees of an establishment desires, that
establishment can voluntarily opt for EPF coverage even if the
employees employed therein is less than 20.
• If your establishment is not covered and at least 20 employees
are working in that establishment, you can approach EPFO to
4. Applicability & Scope :
The Act extend to whole of India except the state of J & K.
Organization ,Establishment employing 20 and more employee are
covered under this act.
The central Govt. after giving 2 months notice by notification in the
official gazette may apply the provisions of this Act to any
establishment employing less than 20 persons.
Schemes Under this Act :
There are three schemes under this Act which are as under-
Employee Provident Fund Scheme
Employee Pension Scheme
Employee Deposit Linked Insurance Scheme
5. The Employee’s Provident Fund Scheme:
This scheme came into force from 1st November-1952
Employees drawing wages upto Rs.6500/ (Basic +DA) are eligible
to become member of this scheme.
The rate of contribution of employees towards this scheme is @
12% of Basic + DA .
The rate of contribution of employer towards this scheme is @
3.67% of Basic + DA. The employer also contribute @1.10% as
administrative charges towards this scheme.
The total contribution of both the employer & employee towards
this scheme is 15.67%.
6. Benefits Under this Scheme:
A member can withdraw his EPF accumulation on the following
1. Retired from the service after attaining the age of 58 years/
Attained the age of 50 years.
2. Retired on account of permanent and total incapacity for work
due to bodily/mental infirmity.
3. Retired under voluntary retirement scheme.
4. Migration from India for permanent settlement at abroad.
5. Leaving India at least for one year.
6. Retrenched from service.
7. Discharged from service on receiving compensation under
Industrial Dispute Act-1947.
8. Resigned and not employed in any factory to which the
Employees provident Fund scheme applies.
7. Partial Withdrawal/Advances :
A member can withdraw the EPF accumulations/ non refundable advance
from EPF scheme on following grounds-
For self marriage. 7 years service is required .50 % of employee share.
For marriage of son/daughter, brother, sister. 7 years service is
required. 50% of employee share.
For education of self,son,daughter.7 years of service is required and 50%
of employee share.
For medical treatment of self, spouse, son , daughter, father, mother.
No service period is required. 6 times of wages or full of employee share
whichever is less.
For Purchase and construction of dwelling units (house/flats). 5 years
service is required .36 times of wages.
To meet natural calamities. No service period is required to avail this
benefits.Rs.5000/ or 50 % of members share of contributions.
8. • Repayment of housing loan.10 years service is required.36 times of
• For purchase of site/plot.5 years of service is required.24 times of
• Addition/alteration of house.5 years service is required.12 times of
• Repair of house. same type of advance can be availed for alteration
of house.10 years of service is required. 12 times of wages.
• Lockout or closure of the establishment. wages for at least 2 months
not paid. No minimum service required. should be closed for 15 days.
balanced should be there in employee share. Equivalent to the total
of wages multiplied by no of months closed.
• Withdrawal prior to retirement.no minimum service required.at least
54 years of age.1 year before retirement.90 % of total of both the
9. Employee’s Share
(to EPF Fund)
(to EPF &FPF fund)
of Basic + DA
of Basic + DA
of Basic + DA
Total:- 11.16 %
10. Employee’s Share
(to EPF Fund)
(to EPF & Pen. fund)
of Basic + DA
of Basic + DA
of Basic + DA
11. The scheme shall apply to every employee –
who on or after the 16th November-1995 becomes the member of the
Employee Provident Fund Scheme-1952 or of the provident funds of
the factories and other establishments exempted by the appropriate
Who has been a member of the ceased Employees’ Family Pension
Scheme,1971before the commencement of this scheme from 16th
Who ceased to be a member of the Employees’ Family Pension
Scheme,1971 between 1st April,1993 and 15th Nov-1995
Retention of Membership-
A member of the Employees’ Pension Fund shall continue to be such
member till he attains the age of 58 years or he avails the withdrawal
benefit to which he is entitled or dies or the pension is vested in him
whichever is earlier.
12. 1. On superannuation.
Age 58 years or More and at least ten years of service
The member can continue in service while receiving this pension
On attaining 58 Years of age, a EPF member cease to be a
member of EPS automatically
2. Before superannuation.
Age between 50 and 58 years and at least ten years of service
The member should not be in service
3. Death of the member, Death while in service or Death while
not in service
4. Permanent disability.
Permanently and totally unfit for the employment which
the member was doing at the time of such disablement
13. Types of Pension:
There are different types of pension which are as under-
1. Monthly Member Pension
It is claimed on superannuation and before superannuation after
completion of 10 years of service and attaining the age between 50 and
2. Monthly Widow Pension
This pension is being framed to provide financial assistance to the family
members of a provident fund member who dies before
completing the age of 50 and 58 years and not completing 10 years of
This financial assistance is given to the widow along with 02 children.
This pension is claimed by the wife of a member after death of the
member while in service and not in service. The condition of 10 years
service and 58 years of age is not required for claiming this pension.
14. 3.Monthly Children Pension
Children pension is claimed only after death of the member. 02
children upto the age of 25 years or upto their marriage are
entitled to get this pension along with widow/widower.
4.Monthly Orphan Pension
This pension is claimed after the death of the member and
5. Disablement Pension
This pension is claimed by member on permanent and total
disablement during employment.
15. Formula/Method for Calculation of Pension:
Monthly Member’s Pension =
Pensionable Salary x Pensionable Service
The average pay for the last contributing service in a span of 12 months is
to be taken to determine the pensionable salary.
The pensionable service is the total service rendered by the member for
which the contributions are received under the Family pension
Scheme,1971 (past service) and the Employees’ pension Scheme,1995
In the case of the member who superannuates on attaining the age of 58
years and who has rendered 20 years pensionable service or more , his
pensionable service shall be increased by adding a weightage of 02 years.
(Pension for new entrants)
i) Pensionable Salary Rs. 1500/
ii) Pensionable Service 33 years
iii) Retirement Age 58 years
iv) Benefit of 2 years more than 20 years of service
Pension = Rs1500 x (33 + 2 )
= Rs. 750/ p.m
Date of birth of member : 20.11.37
Date of joining EPF Scheme,1971 : Sept.1971
Pensionable Salary : Rs.1500/
Date of retirement : 30.11.1995
17. In order to expedite the calculations of pension, two tables have been
prepared .Table -A shows the quantum of pension payable at the age of 58
on the basis of the age attained on 16.09.1995.
Age ELIGIBLE SERVICE AS AT EXIT
As on ____________________________________________________________
16.11.95 24 23 22 21 20 19 18 17 16 15 14 13 12 11
58 to 54 500 479 458 438 417 396 375 354 333 313 292 271 265 265
53 to 49 600 575 550 525 500 475 450 425 400 375 350 325 325 325
Age on retirement : 58 years
Age on 16.11.95 : 58 years
Pensionable service : 24 years
(Eligible service at exit)
Read the 1st rows which shows the 58 to 54 age group, then read the
column of eligible service at exit of 24 years. The intersected figure will
be pension payable which is Rs.500/-p.m
18. Example -3
Date of birth : 26.1.43
Pensionable salary : Rs.2000/
Date of joining FPF : 1.9.1980
Date of retirement (exit) : 31.12.95
Subscribers want pension on retirement age which is not 58 years
i) Age on the date of retirement : 52 years 11 months
ii) Age on 16.11.95 : 53 years
iii) Pensionable service : 15 years
As the member desires the pension at the age of 53 years which is earlier
than 58 years a pension discounted by multiplying the pension at Table ‘A’
by discounting factor at Table B is given below-
Age at Retirement Discounting Factor
19. 56 0.884
In the present example first we have to read Table “A’ in the second row
age group 53 to 49 years against eligible service of 15 years at exit . The
figure comes out to be Rs.375/p.m which is payable at the age of 58
years. But in this case , the subscriber wants the pension immediately on
retirement/ exit age i.e 53 years. The discounting factor, therefore has to
be applied. In this case, the discounting factor as per Table “B” is 0.75.
The pension payable ,therefore will be:
= Rs.375 x 0.75
A member can receive pension after putting in 10 years of
eligible services .This period of minimum service is not
applicable in the case of Widow’s pension/Disablement
pension/ children's’ pension/orphan’s pension .
The Widow’s pension, children’s pension and orphan’s pension
is payable after only 30 days of actual contribution.
A member can opt for discounted/reduced pension before the
age of 58 but not earlier than 50 years.
If a member opt for reduced pension his/her nominee or the
widow / widower can get benefit of capital return equal to
100 times of monthly pension in lump-sump along with
Provision for nomination in the absence of the member’s
family is made.
21. The option is also available to become a member of the Employee’s
Pension Scheme,1995 w.e.f 01.04.1993 under certain conditions.
On completing 33 years of pensionable service , the pension
entitlement shall be 50 % of the members pay at the time of
60 % entitlement of pay on completion of 40 years pensionable
Family pension cover for widow/ widower for life or until her
remarriage and to two children upto 25 years of age, upon death of
the member, be it in service, out of service or after receiving the
pension on retirement.
To further improve upon the benefits there is provision for valuation
every three years by the actuary.
22. EFPS 1971 (Old Scheme):
1. Monthly widow pension was
payable if the employee had
put in at least 3 month ,
2. Monthly Family Pension was
payable to only one person at a
3. No benefit were paid in case
of permanent and total
4. Only withdrawal benefits
were paid if a member expired
after leaving the employment
and no pension to the widow
was payable in such cases.
1. Monthly widow’s pension is
payable after one month’s
2. Monthly pension is paid to
three persons at a time i.e
3. Monthly pension is given to
disabled persons on one month’s
4. Even after leaving service ,if
a member expires, monthly
pension is paid to the
widow/widower and two
23. 5.Maaximum monthly family
pension on a pay of Rs.5000/
p.m was Rs.1050/p .m(Rs.1750/
in case of 7 years of service)
6. No provision for nomination.
7. No provision for capital
8. No widow/children’s pension
in case of death of the member
whose account was not settled,
if he was not in service.
9.Pension was available only
5.On pay of Rs.5000/ monthly
family pension would be upto
Rs. 1750/ plus Rs.875/ p .m to
6. Pensions both in and outside
the family can be nominated.
7. 100 times equivalent to
pension is payable as return of
capital if the pensioner opts for
8. Pension is available to
widow/children to a holder of
certificate of contribution,
short service , even when
he/she is out of employment.
EFPS 1971 (Old Scheme): EPS-1995(New Scheme):
24. Documents required for Settlement of pension claim
1. Original Death Certificate.
2. Form No-10 D (in triplicate).
3. 3 nos. of pass port size photo for each claimant.
4. 3 nos. of pass port size joint photo (husband with wife)
5. List of family members duly certified by the employer.
6. List of lagal heirs.
7. Age proof of each claimant.
8. Details of bank accounts of the claimants.(nationalized bank)
25. Employees Deposit Linked Insurance Scheme:- 1976
This scheme came into force from 1st August-1976
The employees deposit linked insurance scheme has been framed for
the purpose of providing life insurance benefits to the employees of any
establishment or class of establishments to which the Act applies.
The employer only contribute @ .5 % of Basic + DA towards this scheme
subject to the maximum celling of Rs.6500.00 PM.
The employer also contribute @.01 % of Basic + DA , as administrative
charge towards administration of this scheme.
The nominee/legal heirs of the deceased member will get insurance
benefit upto Rs.1 ,30,000/.The minimum insurance benefit under this
scheme depends on the average balance of wages during preceding 36
months from the date of application.
26. Nomination:- who will be a Nominee ?
The family members of a EPF members will be nominee. Under
EPF Act the definition of Family includes Husband, wife and
children . So if the member is a married person ,his wife and
children will be nominee.
If the member is unmarried, his father and mother, brother, sister
will be his nominee.
The nominee may be more than one and the % of share may be
differ from nominee to nominee.
A member can nominate a person from in and out of his family.
27. DO'S FOR A MEMBER:
1) While joining an establishment, furnish details of previous
employment if any, with previous Provident Fund a/c number and
2) In case of existing Provident Fund/ Pension a/c, apply for transfer of
previous a/c number to the present a/c number.
3) Ensure that employer furnishes Form-5 with details of previous
Provident Fund a/c no. to Employees' Provident Fund Organization.
4) Execute Form-2, with details of self, nominee for Provident Fund
and pension and details of family, so that it is forwarded to
Employees' Provident Fund Organization by the employer.
5) Ensure that particulars furnished are correct in all respects.
6) Ensure that enrolment to Employees' Provident Fund/ Employees'
Pension Scheme is done immediately on the date of joining the
7) Ensure that Provident Fund is deducted at statutory rate from the
total wages i.e. basic, D.A.and retaining allowance if any.
28. 8) If desirous of enhancing rate of contribution, inform your
willingness with the higher rate opted and forward to Employees'
Provident Fund Organization through employer and allow employer
to deduct at enhanced rate from the wages.
9) If the wages drawn is more than Rs. 6500/-, intimate your
willingness to contribute on the whole salary as per higher rate to
Employees' Provident Fund Organization through employer.
Employer can also contribute on the whole amount drawn as wages
under intimation to Employees' Provident Fund Organization.
10) Check up periodically with the employer that contribution and
other charges are paid to Employees' Provident Fund Organization
and ensure it's correctness by verifying the Form-3A (contribution
card) maintained by the employer.
29. FORMS USED UNDER THIS ACT:-
Form-2-nomination cum declaration
Form-3A-monthly contribution card
Form-5- details of new member
Form-5 A- application for registration
Form-5 IF-claim for EDLI
Form-6A- annual contribution card
Form-9 -details of new member
Form-10- details of employees leaving services
Form-10 C-withdrawal of EPS
30. Form-10 D- Pension Claim
Form-11- declaration by the employee
Form-12 A-details of monthly Chillan and employee.
Form-13-Inter Regional transfer of EPF
Form-13 A-Intra Regional transfer of EPF
Form-19-withdrawal of EPF
Form-23-Annual statement of accounts .(PF Slip)
Form-ASR-Details of bank accounts of a member whose money has
returned back from bank.
31. Don't give false declaration and incorrect particulars to
Employer and Employees Provident Fund Organization.
2) Don't fall victim to middleman/ agents. Please Contact
PRO for Doubts / Clarifications if any.
3) Don't allow Employer to deduct his own share of
contribution or administrative charges payable by him from
4) Don't be a party to misclassification of allowances of your
wages, with a view to avoid payment of Provident Fund.