Page 109 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes 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.

6.4.1 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.

6.4.2 Withdrawals

Under the scheme, a member may withdraw the full amount standing to his credit in the fund in
the event of
(i) Retirement from service after attaining the age of 55;
(ii) Retirement on account of permanent and total incapacity;
(iii) Migration from India for permanent settlement abroad; and
(iv) 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.
The Scheme provides for non-refundable partial withdrawals/ advances to meet certain
contingencies

(1) Financing of life insurance policies;
(2) House-building;
(3) Purchasing shares of consumers’ cooperative credit housing societies;

(4) During temporary closure of establishments;
(5) Illness of member, family members;
(6) Member’s own marriage or for the marriage of his/her sister, brother or daughter/ son and
post-matriculation education of children;
(7) Damages to movable and immovable property of members due to a calamity of exceptional
nature;
(8) Unemployment relief to individual retrenched members;
(9) Cut in supply of electricity to the factory/establishment; and

(10) Grant of advance to members who are physically handicapped for the .purchase of equipment.

104 LOVELY PROFESSIONAL UNIVERSITY