EMPLOYEES PROVIDENT

FUND AND
MISCELLANEOUS
PROVISIONS ACT, 1952

Purpose

The employees provident funds and

miscellaneous act,1952:
is a piece of social legislation
a beneficent measure,
enacted for the purpose of institution of
provident fund for employees in factories
and other establishments.
Provident fund is an effective old-age and
survivorship benefit.

HISTORICAL BACKGROUND
WITH THE INDUSTRIAL GROWTH
Some big employers introduced schemes of PF for
welfare of workers.
But these were private and voluntary
Workers of small employers remained deprived
Therefore grouse of deprived workers gained
momentum.

 In 1946, Labour Investigation committee was

formed to investigate the functioning of the above
mentioned private and voluntary PF schemes.
On 15th November 1951, the govt of India
promulgated the Employees Provident Funds
Ordinance which was subsequently replaced by the
Employees Provident Funds and Act passed
on 4th March 1952.
This act extends to the whole of INDIA except the
state of JAMMU AND KASHMIR

Objective of the Act

The object of the act is
to provide substantial security
timely monetary assistance to

EMPLOEEYEES

THEIR FAMIILY
MEMBERS

Applicability
This act applies to every establishment,
which is
a factory, and
to any other establishment employing 20
or more persons which the Central govt
may by notification in the Official Gazette,
specify in this behalf
Except
Co-op socits
Govt employes under cpf

But the Central Government is

empowered to apply the provisions
of this act to any establishment
Employing less than 20 persons
By giving a notification at least 2
months before it intends to do so.

Extended application
Establishment not covered through the
act can be covered through the act
On an application made to the CPF
commissioner
Stating that the employer and the majority
of employees agree to the applicability of
the act to the establishment

Important definitions under this Act

Basic wages : It means all emoluments
earned by an employee while on duty or on
leave with wages in accordance with the
terms of employment and which are paid or
payable in cash to him, but does not include;
(i) the cash value of the food
concession
(ii) allowances payable to him
(iii) any presents made by the
employer

Employee : It means any person who

is employed for wages in connection
with the work of an establishment
who gets wages directly or indirectly
from the employer
includes any person employed by or
through a contractor

Excluded vs Exempted
Employees
Excluded employee:
Who has withdrawn the full amount of
his accumulations after retirement
Who is drawing more than Rs 15000/ PM
Who is an international worker
Exempted employee:
- Employees who are exempted from the
scheme as per section 17 of the Act

Employer : In relation to a factory

establishment, the employer means
the owner or occupier,
including his agent ,
the legal representative of a deceased
owner or occupier
manager of the factory
For other establishments,
the person who has the ultimate control
over the affairs of the establishment.

Power to apply act to establishments

with common PF
When immediately before this act
becomes applicable to an
establishment there is in existence a
provident fund which is common to
the employees employed in that
establishment and employees in any
other establishment, the central govt
may, notification in the Official
Gazette, direct that the provisions
shall also apply to such other

Components of the Act

This Act includes :
(i) Employees Provident Fund Scheme
(ii) Employees Pension scheme
(iii) Employees Deposit-linked Insurance
Scheme.

EMPLOYEES PROVIDENT FUND

SCHEME
According to Section 5 of this Act the
Central Govt may, by notification in
the Official Gazette, frame a Scheme
to be called the Employees
Provident Fund Scheme for the
establishment of provident funds
under this Act

EMPLOYEES PENSION
SCHEME
Section 6.A provides that the Central
Government may frame an Employees
Pension Scheme for:
Superannuation pension, retiring pension
or permanent total disablement pension to
the employees covered under the act.
Widow or widower's pension, children
pension or orphan pension payable to the
beneficiaries of such employees.

Employees Deposit-linked
Insurance Scheme
The Central Government under Section 6-C
of the Act may formulate an Employees
Deposit-linked Insurance scheme for
providing:
Life insurance benefits to the employees
of any establishment or class of
establishments to which the Act applies.

Administration of the
scheme

CENTRAL BOARD

Section 5.A provides that the Central Government may

by notification in the Official Gazette constitute a
Central Board for all such territories as to where the
Act applies.
The Board shall constitute of
A Chairman and a Vice-Chairman;
The Central Provident Fund Commissioner who shall
be an ex-officio member of the Board;
Not more than fifteen persons appointed by the
Central Government from amongst its officials; and

Contd..
Not more than fifteen persons representing the
Government of the States;
Ten persons representing employers of the
establishments to which the scheme applies;
Ten persons representing employees in the
establishments to which the scheme applies.
NOTE: ALL APPOINTMENTS TO BE MADE BY THE
CENTRAL GOVERNMENT.

DUTIES OF THE CENTRAL

BOARD
The Board is expected to
administer the funds vested in it by means of
contributions,
maintain proper accounts of its income and
expenditure in such form and in such manner
as prescribed by the Central Government, and
also perform such other functions as it may be
required to perform by or under any provisions
of the Employees Provident Fund Scheme and
the Insurance Scheme under the Act.

EXECUTIVE COMMITTEE
Section 5(AA) provides that the
Central Government may, by means
of a Notification in the Official
Gazette, constitute an Executive
Committee to assist the Central
Board in the performance of its
functions.

Constitution of EC
Executive Committee shall consist of:
A Chairman appointed by the Central Government from
amongst the members of the Central Board;
Two persons appointed by the Central Government from
amongst its officials nominated into the Central Board;
Three persons appointed by the Central Government from
amongst the State nominees in the Central Board; and
Three persons representing the employers elected by the
Central Board from amongst the fifteen representatives of
employers in the Central Board;
Three persons representing the employees elected by the
Central Board from amongst the fifteen representative of
the employees in the Central Board; and
The Central Provident Fund Commissioner as the ex-officio
member.

STATE BOARD
Section 5.B provides that the Central
Government may, after consultation
with the Government of any State, by
means of a Notification in the Official
Gazette, create a State Board for
such State. Such a State Board shall
exercise such powers and perform
such duties as the Central
Government may assign to it from
time to time.

OFFICERS OF THE BOARD

The Central Govt shall appoint:
A Central Provident Fund Commissioner who is to serve
as the Chief Executive Officer of the Central Board and
shall be under the general control and superintendence
of the Board.
The Central Govt may also appoint:
A Financial Adviser and Chief Accounts Officer to assist
the Central Provident Fund Commissioner in the
discharge of his duties; and
As many Additional Provident Fund Commissioners,
Regional Provident Fund Commissioners, Assistant
Provident Fund Commissioners, and such other officers
and employees as it may consider necessary.

EMPLOYEES PROVIDENT FUND

APPELLATE TRIBUNAL
The Central Govt may constitute one or more
employees provident fund appellate tribunal for
establishments situated in such area as notified in
notification constituting the tribunal.
A tribunal shall consist of only one person who will
be the presiding officer
A person can not be the presiding officer of a
tribunal unless he is, or has been, or is qualified to
be,(i) a judge of a high court; or
(ii) a district judge

Can the employer reduce

wages?
The Statute in unequivocal terms
stipulate that no employer can
reduce, whether directly or indirectly,
the wages or any other benefits to
which the employees are entitled to,
either by reason of his liability for the
payment of any contribution to the
Funds under the Act or due to any
charges under the Act or any scheme
there under.

Inspectors and their powers

May ask an employer to furnish information as he
may consider necessary.
May enter and search concerned premises and also
ask to produce documents for examination
Makes copies of, or take extracts from, any book,
register or other document maintained in relation
to the establishment and, where he has reason to
believe that any offence under this Act has been
committed by an employer, seize with such
assistance as he may think fit, such book, register
or other document or portions thereof as he may
consider relevant in respect of that offence;
Exercise such other powers as the Schemes under
the Act may provide

Cognizance and trial

The Act provides that no court shall
take cognizance of any offence
punishable under the Act, except on
a report in writing of the facts
constituting such offence made with
the previous sanction of the Central
Provident Fund Commissioner or such
other officer as may be authorised by
the Central Government.

BENEFITS TO MEMBERS UNDER

EPF SCHEMES
There are 3 major benefits
Provident Fund Benefits
Pension Benefits
Death Benefits

1. Provident Fund benefits

Employer also contributes to Members PF
EPFO guarantees the Employer contribution and
credits interest at such rates as determined by the
Central Government. (Present Interest Rate is
8.75%)
On resignation, the member can settle the account.
i.e., the member gets his PF contribution, Employer
Contribution and Interest.

2. Pension benefits
Pension to Member
Pension to Family (on death of member).
Scheme Certificate
Withdrawal Benefit

How to get Pension

Member has to attained the age of 50 years or

more.

Member has to complete a total service of 10

years or more.

Member should not get any other EPF Pension.

Member has to apply in Form-10D at the EPF

Office where Member has last worked through
last Employer.

 If the member wants to draw pension from

a different place, The member have to
furnish appropriate Bank / Post Office
address in the application form.
Pension is distributed through Post Offices
or through some designated banks only
(eg: Indian Bank, SBI, Indian Overseas
Bank, HDFC Bank, ICICI and UTI Bank)

1. On superannuation
(Age 58 years or more and
atleast 10years of service)

The member can continue in

service while receiving
this pension
On attaining 58 Years of age,
a EPF member cease to
be a member of EPS
automatically

2. Before superannuation
(Age between 50 and 58 years
and at least ten years of
service)

The member should not be in

service

3. Death of the member

Death while in service or

Death while not in service

4. Permanent disability

Permanently and totally unfit

for the employment which
the member was doing at the
time of such disablement

Scheme Certificate
This Certificate shows the service & family details of a member
This is issued if the member has not attained the age
of 58 while leaving an establishment and he applies for this
certificate
Member can surrender this certificate while joining another
establishment and the service stated in the certificate is
added with
the service he is gaining
from the
new
establishment.
After attaining the age of 50 or above, the member can apply
for Pension by surrendering this scheme certificate (if total
service is at-least 10 years)
This is a better choice than Withdrawal Benefit, as a member
dies holding a valid scheme certificate, his family will get
pension (Death when NOT in service)

Withdrawal Benefit
If not eligible for pension, member may withdraw the
amount accumulated in his pension account.
The calculation of this amount is based only on (i)
Last average salary and (ii) Service (Not based on
actual amount available in Pension Fund Account)
No amount is taken from Member to give Pension to
the Member. Employer and Govt. contributes to
Pension fund @8.33% and @1.61% respectively
EPFO guarantees pension to members, even if the
Employer has not contributed to Pension Fund.

How to settle EPF account

The Member has to resign or retire from the establishment and
apply for settlement of PF in Form-19. If the member exits before
55 years of age, the member should not work in any covered
establishment for a period of 2 months from the exit date.
If the member dies, Family members/Nominee have to apply in
Form-20 for settlement of PF (In case of death, apply in From-10D
and Form-5IF for Pension and EDLI also)

How to transfer the account / What to do

if joined in another establishment
The Member has to apply in From-13(R) through the NEW
Employer at the EPF Office from which transfer is sought clearly
stating New and Old EPF Numbers. Member has to obtain new
EPF Number from the New Employer. New EPF Number will be
allotted by New Employer, not by EPFO.

Employees' Deposit Linked Insurance

(EDLI) Scheme
On death of a member, the Family Members or Nominee
(whoever has the entitlement to claim Provident Fund
amount) can claim for EDLI Benefit. Maximum amount
payable is Rs. 1,30,000/-.
The nominee(s) have to apply in From-5IF through the
Employer.
No amount is taken from the Member for this facility.
Employer contributes for this.
Average PF Balance, salary and service are the factors
considered for the calculation of this amount

Advance/ Withdrawals may be availed for

the following purposes:
Marriage / Education
Purpose : For the marriage/education of Self & Family
Eligibility : Should Complete atleast 7years of service.
Max Amount : 50% of Empe Share
Document : Apply in Form 31 thorough the Employer
Treatment
Purpose : Treatment of Self, Family (Dependents)
Eligibility : No minimum service required
Max Amount : 6 times of Wages or Full of Empe Share
Documents : Apply in Form 31 through the Employer
Purchase or construction of Dwelling house
Purpose : Purchase or Construction House/Flat
Eligibility : Should complete 5years only in one service.
Max Amount : 36 times of Wages.
Documents : Apply in Form 31 through Employer

Repayment of Housing Loan

Purpose
: Payment of House Loan
Eligibility : Should complete 10years only in one service.
Max Amount
: 36 times of Wages
Documents : Apply in Form 31 through the Employer
Purchase of Plot
Purpose
: Purchase of Site/Plot
Eligibility : Should complete 5years only in one service
Max Amount
: 24 times of Wages
Documents : Apply in Form 31 through the Employer
Addition/Alteration of House
Purpose
: Repair of house
Eligibility : Should complete 5years only in one service /
Construction of House.
Max Amount
: 24 times of Wages
Documents : Apply in Form 31 through the Employer
Lockout
Purpose
: Lockout of Closure of the Establishment
Eligibility : Should be closed for 15days / No wages for 2months.
Max Amount
: Total of wages multiplied by no.of months closed
Documents : Apply in Form 31 through the Employer

Withdrawal Prior to Retirement

Purpose
: Withdrawal prior to Retirement
Eligibility : No min service, atleast 54 years of age /
1year before retirement.
Max Amount
: 90% of total of both shares
Documents : Certificate from the Empr showing the date of
retirement / Apply in Form 31
Other Advances
Purpose
: Advance in Abnormal Conditions
Eligibility : Certificate of damage from appropriate authority
Max Amount
: Rs. 5000/- or 50% of members own share of
contribution.
Documents : Certificate from Appropriate authority / Form 31.
IMPORTANT:

The amount of advance/withdrawal is not required to be refunded

under normal circumstances. If the amount is not utilised, the same
should be refunded with penal interest.