Provident Fund

The Employees’ Provident Fund (EPF) is a mandatory benefit for Indian employees under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Central Board of Trustees (CBT), comprising representatives from the government, employers, and employees, oversees its management. The Employees’ Provident Fund Organization (EPFO) aids the CBT in administering the EPF nationwide.

Concept of Employees’ Provident Fund

The Employees' Provident Fund (EPF) scheme is designed to provide financial security for employees after retirement or when they leave their jobs. Both employers and employees contribute to the fund, and the accrued interest is credited to the employee's Provident Fund Account (PF account). This amount can be accessed by the employee upon retirement or termination, with benefits also extended to dependents in case of the employee's demise.

Types of schemes under the Act

1. The 1952 Provident Fund Scheme for Employees: The Employees’ Provident Fund Scheme was established pursuant to the Act with the aim of furnishing post-retirement benefits to employees, or a designated group of employees, as well as extending support to their legal heirs in the event of their demise. This pertains to individuals engaged in employment within establishments subject to the provisions of this Act.

2. 1995 Scheme for Employee Retirement Benefits: The Employees' Pension Scheme was established within the framework of the Act to ensure the provision of retirement benefits such as superannuation pensions, retiring pensions, or permanent total disablement pensions to eligible employees of covered establishments. Additionally, it extends support by offering widow or widower's pensions, children's pensions, or orphan pensions to the dependents of qualifying employees.

3. The Insurance Scheme linked to Employees' Deposits, established in 1976. The EDLI Scheme, established within the framework of the Act, aims to furnish insurance coverage to employees within an establishment or specific group of establishments falling under the Act's purview, ensuring financial protection in the event of the employee's demise during active service.

Applicability

The Employees’ Provident Fund (EPF) is established under the jurisdiction of The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 ("the Act"), which applies nationwide. The Act mandates the coverage of all factories or industries listed in Schedule 1, where 20 or more individuals are employed. Additionally, it extends to any other establishment as notified by the Central Government in the official Gazette, regardless of the number of employees being fewer than 20.

Eligibility to be the member of EPF

It is required for individuals to enroll in the Provident Fund (PF) membership.

1. 1. A person who is hired to perform tasks or duties for an organization in exchange for compensation, whether the work involves physical labor or other forms of contribution.

2. 2. A person hired through a subcontractor or employed as a trainee but not officially registered as an apprentice under the Apprentices Act of 1961.

3. 3. Any individual employed within an organization, whose monthly earnings do not exceed Rs. 15,000, excluding those specifically designated as exempted personnel under Section 17 of the legislation.

Withdrawals from EPF account

1. 1. At the age of 58 or upon retirement, individuals are eligible to withdraw their entire EPF account balance. Additionally, complete settlements can be claimed upon retirement or if an individual experiences a period of unemployment lasting two months or more. In the unfortunate event of an employee's demise before reaching retirement age, their nominees or legal heirs are entitled to withdraw the accumulated funds.

2. 2. You can access a portion of your EPF funds under various circumstances such as pursuing educational endeavors, covering medical expenses, settling home loan repayments, funding marriage expenses, acquiring property, or coping with the closure of your workplace, natural disasters, or unemployment lasting over a month. Additionally, withdrawal is permitted up to one year before retirement.

Benefits