FREQUENTLY ASKED QUESTIONS PROVIDENT FUND

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1 ` FREQUENTLY ASKED QUESTIONS PROVIDENT FUND These Frequently Asked Questions (FAQs) are general information based on the commonly sought responses and do not amount to advice on any particular matter. You are advised to seek relevant provisions of the appropriate statutes and Acts, along with the rules, circular and notifications issued from time to time, before acting on the basis of any information contained herein. We expressly disclaim all warranties of any kind, whether expressed or implied that the enclosed statements will meet your requirements, will be uninterrupted, timely, secure or error-free. In no event shall Intelenet Global services be liable for any direct, indirect, incidental, punitive or consequential damages of any kind whatsoever with respect to the service or material available through this site ( This website is designed for general information only. The information presented at this site should not be construed to be formal advice or the formation of an advisor/client relationship. Further, these FAQs must also be read along with your company specific HR/Compensation policy for clear understanding.

2 1) What is PF scheme? Provident Fund is a mandatory; Exempt from tax; Defined contribution; And retrial benefit plan Employee and the employer make equal contributions at the rate of 12%. 2) Who administers the Scheme/Fund? Incase of an unexempt establishment The Regional Provident Fund Commissioner (RPFC) administers and manages the fund. In case of Exempt and Excluded Trusts The Board of Trustees administers the Fund. 3) What are the payments made towards an employee for Provident Fund? Employees 12% of salary (basic wages, dearness allowance) 12% of salary Employers 8.33% of the total wages limited to Rs. 6500/- per month per employee is segregated and credited to the Employees' Pension Fund in A/C No. 10 (effective 1st June 2001) 0.5% of total wages subject to a ceiling of Rs. 6500/- per month per employee Balance goes to the employee s Provident Fund Account. 4) Can I contribute more than the stipulated rate voluntarily? If yes, how? Yes, An employee can contribute voluntarily over and above the stipulated rate of contribution. The Voluntary Provident Fund (VPF) contribution can be a certain % of wages or a fixed amount. Voluntary Provident Fund (VPF) contribution is not matched by the employer s contribution. 5) Who will be covered by the Pension Scheme? Private & Confidential Page 2 of 7

3 Every member of the ceased Family Pension Scheme 1971 and Anyone who joins any covered establishment on or after is compulsorily to join this scheme, provided his/her salary/wage is less than Rs. 6500/- per month at the date of appointment 6) What is a covered establishment? Covered establishment is an establishment belonging to the class of industries / other establishments, which has been listed in the schedule appended to the Employees' Provident Fund and Miscellaneous Provisions Act 1952 and where 20 or more persons are employed. 7) If employee is not a Family Pension Scheme member and he/she is 56 years of age, Can he/she join Family Pension? Yes, by diverting from his/her Provident Fund balance, Family Pension Scheme contribution from date of his/her joining or , whichever is later. 8) Whether the Family Pension Scheme member who has attended the age of 58 years before and has left employment after will be admitted to the scheme as member of Family Pension Scheme, 1971? Yes, he will be deemed to have retired after On repayment of that withdrawal benefit which was paid, pension will be paid from same date, provided he has rendered 10 years of contributory service. 9) In case Family Pension member has attained the age of 58 years between and then in that case whether arrears of monthly Member Pension become payable for the period earlier than i.e. from the date of his/her attaining the age of 58 years which is prior to ? No, he/she will be deemed to have retired from and pension paid accordingly. 10) Is employee the only beneficiary of Fund? Benefit will be paid to him/her and in his/her absence to his/her family. 11) What does Family mean? Family means employees' spouse and children below 25 years of age. 12) Suppose an employee does not have a Family and he/she dies before receiving benefit. Does his/her pension get lost? Private & Confidential Page 3 of 7

4 No, if he/she does not have a family, benefits will be paid to his/her nominee, who will receive the benefit in his/her absence 13) Suppose member has not nominated anyone. The pension / ROC will be paid to the dependent parents. 14) Can member change his/her nomination? He/She can change his/her nomination whenever he/she decides within the framework of rules for such nomination. If he/she has a family, nomination should be in favour of a member(s) of the family. If he/she has no family he/she can nominate anyone he/she wishes. 15) How many years service is required to be eligible to receive member pension? Minimum 10 years eligible service will entitle for member pension. 16) Employee is a member of Employees' Pension Scheme. He/She has left employment at 48 yrs. of age and 8 yrs. of service. When shall he/she receive his/her pension? He/She can take either withdrawal benefit or can take scheme certificate so that the 8 years service can be added to any future service that he / she may put in, in any other covered establishment. 17) What is past service pension? This pension is for the period of membership of the Employees' Family Pension Scheme, ) When does an employee become eligible to become a member of Employees' Provident Fund Scheme, 1952 and Employees' Deposit Linked Insurance Scheme, 1976? An employee becomes a member of Employees Provident Fund (Employees' Provident Fund) Scheme, 1952 and Employees Deposit Linked Insurance (Employees' Deposit Linked Insurance) Scheme, 1976 immediately on joining an establishment covered under the Employees Provident Funds & Miscellaneous Provision Act, ) What is nomination? Every member has to give the details of himself & details of the nominee for Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes and details of family for Employees Pension Scheme, 1995 in form no. 2. Private & Confidential Page 4 of 7

5 A member if, is having a family can nominate any one or more persons to receive the Provident Fund on his death. In case of him having no family he can nominate any other person. Family for the purpose of Employee Provident Fund Scheme'52 means wife/husband, children, whether married or unmarried, including adopted children, if adoption is recognized and dependant parents of member. Employees Deposit Linked Insurance Scheme benefit will be paid to the nominee under Employees Provident Fund Scheme, For the purpose of Employees Pension Scheme, 1995 the member has to furnish the details, such as name, relationship & age of all the family members in the form no. 2. Family for the purpose of Employees Pension Scheme, 1995 means wife/husband & children. Whenever member wants to make a change in the nomination already made for Provident Fund, or to update the details of family for Employees Pension Scheme, 1995, he has to send a revised form no. 2. The form no.2 is routed through the employer. 20) What is the procedure to be followed by the member if the employer is not attesting his claim forms? It is the duty of the employer under the Act & Scheme to help Employees' Provident Fund organization to settle the Provident Fund dues of his employees. He has to complete the prescribed application within 5 days of receipt [para72 (5)] forms & hand over it to the member when he leaves the service. When a member finds difficult to get the form attested by the employer, he can get the attestation of any of the following officer & send to the Provident Fund office: Manager of a bank. By any gazetted officer. Member of the Central Board of Trustees. / Committee/ Regional Committee (Employees' Provident Fund Organization). Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public. 21) What is the mode of payment of Provident Fund and Employees' Deposit Linked Insurance dues? Provident Fund & Employees' Deposit Linked Insurance dues is paid by money order/ by deposit in payees' bank a/c Through employer/ by depositing the cheque in payees' name or part of amount in annuity scheme in any nationalised bank. Payment by money order is allowed where the amount is not more than Rs. 2000/-. 22) What are the modalities to be followed for payment through cheque? Private & Confidential Page 5 of 7

6 The member has to open an account in the nationalised bank, scheduled bank, and urban bank or post office savings bank. He has to furnish the details of bank a/c no. with the full address of the bank in application form. An advance stamped receipt has also to be annexed in the form. For receipt of pension member/claimant has to open an account only in State Bank of India or Punjab National Bank. 23) In case of returning of cheque what is the procedure to be followed? Generally the bankers return the cheques when the a/c number is furnished incorrect or a/c has been closed. On receipt of the cheque from the bankers the Provident Fund office will write to the member & employer about the fact & request them to intimate the bank, a/c number & detailed address. In case, the member comes to know about returning of the cheque before this, he can write to the Provident Fund office through his former employer regarding his present address & bank a/c number. 24) What is the time taken for disposal of the application in the Provident Fund office? The claims received complete in all respects are disposed off within a maximum period of 30 days from the date of receipt of claims in the office. In case the member is not hearing anything about his application within 30 days, he can approach the Public Relation Officer. Instructions for a member while sending application to Employees' Provident Fund General: Use the appropriate form for claiming Provident Fund Pension, withdrawal benefit/scheme certificate, Employees' Deposit Linked Insurance benefit, etc. as given below: - Form-19: To claim final settlement of Provident Fund by a member. Form-20: To claim Provident Fund by nominee/legal heir on death of the member. Form-10-D: To claim pension. (In duplicate : If within state, in triplicate : If outside state.) Form-10-C: To claim withdrawal benefit/scheme certificate under Employees' Pension Scheme '95. Form-5IF: To claim assurance benefit under Employees' Deposit Linked Insurance '76 by nominee/legal heir of a member. Form-31: To claim temporary withdrawal/advance under Employees' Provident Fund scheme '52. Form-13: To effect transfer of Provident Fund/Pension from one A/C to another. Ensure that all columns of the application are filled completely. (Please refer Download Forms Section for Specimen copy of the Forms) Private & Confidential Page 6 of 7

7 Information in the application form relating to name, a/c no. Should agree with the details available with Employees' Provident Fund Organization; which were furnished by the employer at the time of enrolling to Provident Fund. Application should be signed by the member/claimant. It should be attested by the former employer. In case attestation by the former employer is not possible, it should be got attested by any other authorized official specified with application form. Application for final settlement Application for final settlement can be sent by a member on completion of 2 months from the date of leaving service, if the reason for leaving service is other than superannuation, medical ground, retrenchment and V.R.S./ Female members getting married etc. Desired mode of payment can be given legibly, if the amount involved is more than Rs. 2000/-. The amount will send by direct deposit in payees' bank a/c. To facilitate this, Bank a/c no., name and address of the bank should be furnished. An advance stamped receipt should also accompany this application. Application may be supported by the return Form-10, showing the details of leaving service and details of contribution for the year in Form-3A, if not sent earlier by the employer. Specific additional requirements: Death cases: Nominee/legal heir should apply in Form-20 /Form-10-D /Form-5IF. If the member has not executed any nomination, application should be supported by certificate of family members issued by employer/revenue official/sworn in an affidavit by the family/ member/legal certificate from a court of law. Death certificate of the member. Certificate of the employer stating whether the death was while in service of the member or not. Pension cases: Joint photograph of member/spouse or the claimant should accompany the application. Option for return of capital/commutation should be specified clearly. Details of non-contributory period during the service, wages/salary for last 12 months should also accompany, if not already sent. Details of the branch of the specified bank may be given legibly. Date of birth certificates of children In case of death away from service, an undertaking by the claimant to the effect that the member was not working / had not worked in any other covered establishment after exit from the establishment on the basis of which pension is being claimed. Private & Confidential Page 7 of 7