Page 191 - DCOM207_LABOUR_LAWS

Labour Laws

Notes Self Assessment

State whether the following statements are true or false:
7. Every member of the Employees’ Provident Scheme 1952 and opted for Employees Family
Pension Scheme 1971.
8. Employee is not required to contribute separately under the Employees’ Pension Scheme
1996.
9. A member is allowed withdrawal benefit where a minimum of pensionable service of 10
years has not been rendered on the date of exit/on attaining age of 58 years.

11.4 The Employees’ Provident Fund Scheme, 1952

The statutory rate of contribution to the provident fund by the employees and the employers, as
prescribed in the Act, is 10% of the pay of the employees. The term “wages” includes basic wage,
dearness allowance, including cash value of food concession and retaining allowance, if any.
The Act, however, provides that the Central Government may, after making such enquiries as it
deems fit, enhance the statutory rate of contribution to 12% of wages in any industry or class of
establishments.
The contributions received by the Provident Fund Organisation from unexempted establishments
as well as by the Board of Trustees from exempted establishments shall be invested, after making
payments on account of advances and final withdrawals, according to the pattern laid down
by the Government of India from time to time. The exempted establishments are required to
follow the same pattern of investments as is, prescribed for the unexempted establishments. The
provident fund accumulations are invested in government securities, negotiable securities or
bonds, 7-year national saving certificates or post office time deposits schemes, if any.

11.4.1 EPF Interest Rate

Under Para 60(1) of the Employees’ Provident Fund Scheme, the Central Government, on the
recommendation of the Central Board of Trustees, declares the rate of interest to be credited
annually to the accounts of provident fund subscribers.

11.4.2 Withdrawals

Under the scheme, a member may withdraw the full amount standing to his credit in the fund
in the event of—

1. Retirement from service after attaining the age of 55;
2. Retirement on account of permanent and total incapacity;
3. Migration from India for permanent settlement abroad; and
4. Termination of service in the course of mass retrenchment (involving 3 or more persons).
The membership for this purpose is reckoned from the time of joining the covered
establishment till the date of the settlement of the claim,
A member can withdraw up to 90% of the amount of provident fund at credit after attaining
the age of 54 years or within one year before actual retirement on superannuation whichever is
later.

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