Page 259 - DMGT516_LABOUR_LEGISLATIONS

Labour Legislations

Notes

Caselet EPF Members can opt for New Pension Scheme

A LL members of the Employees Provident Fund (EPF) can also participate in the
new pension scheme announced by the Government.

Though the scheme is primarily for Central Government employees who have joined the
public services after January 1, 2004, the ordinance says that any person governed under
the EPF may also opt to join the scheme. Under the new pension scheme, the monthly
contribution of employees would be 10 percent of the salary and dearness allowance and
this would be matched by the Central Government. However, it has been clarified that
there will be no contribution from the Government in respect of individuals who are not
Government employees.
Moreover, State Government employees are also eligible to join the new scheme, if the
State, by a notification, extends it to its employees. States that are making quick progress
in their pension fund reforms are Tamil Nadu, Andhra Pradesh, Rajasthan, Madhya Pradesh,
Gujarat, Kerala, Orissa, Himachal Pradesh and Chhattisgarh.

Others who are eligible to opt for the new pension scheme are those who are members of
the Coal Mines Provident Fund, Assam Tea Plantations PF, Jammu and Kashmir Employees
PF and Seaman's PF.
However, the Ordinance caveats that subscribers cannot exit from the scheme except as
specified by a Central Government notification. This notification is yet to be issued.

The five-member Pension Fund Regulatory and Development Authority (PFRDA) will
permit one or more pension funds to receive contributions, accumulate them and make
payments to subscribers.
It is also understood that there would be a "default option" of a pension fund manager and
a pension fund for subscribers who do not want to choose among the various service
providers and their products. This default fund manager is likely to be a public sector
undertaking.

Source: thehindubusinessline.com

10.7 The Employees' Deposit-linked Insurance Scheme, 1976

The scheme came into force from August 1, 1976. It is applicable to all factories/establishments
to which the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 applies. All
the provident fund member-employees are covered under this scheme. While the employees
are not required to contribute to the Insurance Fund, the employers are required to pay
contributions to it at the rate of 0.5% of the pay of the employees who are provident fund
subscribers. The Central Government also contributes to the insurance fund at the rate of 0.25%
of the pay in respect of the covered employee. The employers are also required to pay
administrative charges to the insurance fund at the rate of 0.01% of the pay drawn by the
employees, subject to a minimum of 2 per month. The Central Government also meets partly
the expenses in connection with the administration of the insurance scheme by paying into the
insurance fund an amount at the rate of 0.005% of the pay drawn by the employee members,
subject to a minimum of 1 per month. The employers of exempted establishments are required
to pay inspection charges at the rate of 0.02% of the pay of the employee-members.

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