Under the Employees Provident Fund Scheme, both the employer and the employee have to contribute to the fund. The interest earned on the amount is credited to the member’s provident fund account and made available to the employee at the time of retirement or exit from the job. It is a government-managed pension fund scheme for employees who can deposit a part of their monthly salary into their retirement account. Companies with more than twenty employees are eligible for PF. Both the employee and the employer contribute to the PF fund. The contribution is deposited in the provident fund in the name of the employee. The employer’s contribution is equal to 12% of the basic salary and DA (dearness allowance).
Objectives of the Scheme
The objective of the Employees’ Provident Fund Scheme is to provide post-retirement benefits to the employees or a class of employees employed in an establishment to which this Act applies or to their legal heirs in the event of death.
Benefits of the scheme
Employees can save a small part of their monthly salary as Provident Fund so that they can use this savings amount after retirement or when they are not able to work. 12 percent of the salary is deposited in the Provident Fund by both the employee and the employer.
Eligibility for the scheme
Establishments registered before the commencement of the scheme are required to employ as many people as possible depending upon the context. Any organisation employing at least 20 employees is liable to pay EPF to its employees. The scheme is open to employees from both the public and private sectors. This means all employees can apply to become a member of EPF India. After becoming a member of the EPF scheme, the employee is eligible to receive several employee provident fund benefits including insurance benefits and pension benefits.
Functions of EPF
EPFO is managed by a Central Board of Trustees to administer the Provident Fund Scheme, Pension Scheme and Insurance Scheme for establishments registered in India and covers employees of such establishments which have international employees.
- Enforcement of the Act throughout the country (except Jammu and Kashmir)
- Maintenance of personal accounts
- Settlement of Claims
- Investment of funds
- Ensuring prompt payment of pension
- Updating a record
What is Universal Account Number (UAN)
- Universal Account Number has been made mandatory for all persons covered under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.
- UAN is a 12 digit number which is allotted to the employee by EPFO on which EPF scheme is applicable.
- An employee should have only one UAN.
- Both the old employer and the new employer will be visible in the UAN linked to the PF number. Hence UAN acts as a proxy for multiple member IDs allotted to the individual by different employers.
- This is a permanent number that will remain the same throughout the individual’s career.
- When you join a new organisation, the first thing you should do is ask your employer for a ‘New Form No. 11- Declaration Form’ to provide your existing UAN. If you don’t have it, just provide your previous PF number and the date you left your previous job.
What is Employee Provident Fund
- Interest is an additional amount which is given every month on the employee’s PF contribution.
- Interest in EPF is calculated based on the monthly running balance in the EPF account.
- EPF interest rates are announced every year by the Central Government.
- The revised EPF interest rate for FY 18-19
is 8.65%.
What is the e-service of the scheme
The UAN Member e-Service portal allows employees to register their UAN in the portal and activate it to access the services offered by the portal. The available services include downloading UAN card, updating KYC information online, getting EPF account passbook linked to UAN, making transfer requests, and more.
Online process of EPF withdrawal
- Individuals must have an active Universal Account Number (UAN).
- The mobile number used to activate the UAN should also be active.
- The UAN must be linked to Aadhaar. They will also need the relevant bank details along with PAN and IFSC code.
- Individuals will have to verify their KYC details and then proceed as per the instructions.
What are the rights of employees who are members of the EPF scheme
- Get claim form free of cost.
- Get guidance on how to fill up the form.
- Final authority from Provident Fund.
- Register your complaint and get it redressed within 15 days.
- Right to obtain UAN from EPFO.
- Right to monthly payment of pension.
- Right to transfer your accumulated funds to a new account.
Register a complaint related to EPF scheme
- If any employee wants to lodge a complaint then the officers can lodge the complaint on the website www.epfigms.gov.in.
- On the top bar, click on the ‘Lodge Complaint’ button.
- Its registration form will be displayed. Enter all the information asked in it like PF account number, address of your regional EPF office, name and address of the business, PIN code, country, phone number and email address. After that click on the submit button.