Amity Business School

Objective
To provide for the following three Benefits : 1. Provident Fund 2. Pension 3. Employees Deposit Linked Insurance

Provident Fund (PF)

Amity Business School

A lump sum payment to take care of income after retirement (retiral income)

Pension

Amity Business School

An annuity payment to take care of income after retirement (retiral income)

Employees Deposit Linked Insurance Amity Business School (DLI)

An employer funded group insurance for employees

Amity Business School

The following 4 schemes have been framed under the act by the central govt.

1. The Employees Provident Funds Scheme,1952 2. The Employees Family Pension Scheme, 1971 3. The Employees Deposit Linked Insurance Scheme,1976 4. The Employees Pension Scheme,1995 Note: The Employees Family Pension Scheme, 1971 was discontinued and its assets transferred to the Pension Scheme when the Pension Scheme came into force in 1995.

Family Pension

Amity Business School

A pension payable to the family of the pensioner after his death.

Social Security

Amity Business School

Social Security is public assistance or group support in old age, sickness, disablement, unemployment and in other cases of undeserved want, misery and insecurities of life. ( adapted from Art. 41 of the Constitution of India). The support or assistance is usually contributory-employees, employers and the State. Employee Benefits are an example. Social Security can be for citizens, generally, and not only for the employed.

Amity Business School

Applicability (S.1)
To factories employing 20 or more, in industries as specified in Schedule-I to the Act (76 industries are specified in Sch-I). To every establishment employing 20 or more in industries as given in the Appendix to the Act ( The Appendix lists 50 industries including mines, plantations, railways, oilfields, major ports, construction, controlled industries (as notified by the Central Government under Industries Regulation and Development Act 1952), transport , trading and commercial establishments, hotels, cinemas, universities, colleges, schools, clubs, socities and associations, etc.) Central Govt. can extend applicability to establishments employing less than 20 by a notification after giving 2 months notice. The Act is applicable only to such employees of these factories and other establishments whose pay does not exceed Rs 6,500 per month [S. 2(f)].

Employee

Amity Business School

Means any person employed directly or indirectly through a contractor, and includes an apprentice [S. 2(f) of the Act] Only such employees whose pay does not exceed Rs 6,500 per month are entitled get benefits under the Act ( are covered)

Pay

Amity Business School

Includes basic pay, D.A. (Dearness Allowance), Retaining Allowance and cash value of food concessions admissible. Retaining Allowance means an allowance paid for retaining the employee in employment, whether he works regularly or only when required, like a lawyer may be retained for an annual payment + per day remuneration for appearance in courts.

Contributions
Benefit Employers Contribution ( % of salary) Employees Contribution ( % of salary)

Amity Business School

Central governments Contribution ( % of salary) Nil

Provident Fund (PF)

12% ( 10% in the case of sick industries)

12% ( 10% in the case of sick industries)

Pension ( w.e.f. 1995, instead of Family Pension, which was discontinued in 1995) Deposit Linked Insurance (DLI) ( since 1976)

(8.33%) from out of the 12% already contributed towards PF

Nil

1.16%

0.5% (+ 0.01% towards administrative expenses of the Deposit Linked Insurance Fund), Total=0.51% 12.51%

Nil

Nil

CTC on account of all Benefits under the EPF Act

Provident Fund Benefits

Amity Business School

When Payable: Payable on Superannuation, retirement on permanent total disablement, voluntary retirement, retrenchment, closure or death of the employee ( payable to widow/ widower/ children/ orphan) How Much Payable: Accumulated balance including employees contribution and 3.67% (12%-8.33%)of the employers contribution+ accumulated interest till the day PF becomes payable Superannuation means retirement on attaining the age of retirement

PF-Benefits (Withdrawals and Advances from PF)

Amity Business School

Withdrawls are permissible from the Provident Fund Account of an employee for various purposes including purchase or construction of a house, acquisition of a house site, payment of various loans, etc. Advances are permissible for meeting expenses on illness, marriages, education of children etc.

Pension-Benefit

Amity Business School

When Payable: Payable on Superannuation, retirement after a minimum qualifying service of 10 years, permanent total disablement or death ( payable to widow/ widower/ children/ orphan) How much payable: Full Pension (after a Minimum Qualifying Service of 20 years)= Pensionable Salary. Pensionable Service/ 70
Note 1.:' Pensionable Salary is average salary received in the last year before retirement, not acceding Rs 6,500 per month 2.: Pensionable Service means the completed numbers of years of service. 3. Short Service Pension is payable after a minimum of 10 years of service but less than 20 years. It is calculated using a different formula.

Deposit Linked Insurance (DLI)-Benefit

Amity Business School

When Payable: Payable on death or Permanent Total Disability to the family How much payable: Average balance in the account of the deceased during the preceding 12 months, including interest, subject to a minimum of Rs 35,000 and a maximum of Rs 60,000.

CPFC

Amity Business School

Central Provident Fund Commissioner (CPFC) is the CEO for the administration of the Act. He also decides disputes regarding applicability, amount due, etc. (S.7-A). He can recover damages not exceeding the amount of arrears (S. 14-B).

Offences and Penalties

Amity Business School

Default in payment of contribution by the employer is a cognizable offence( Police can arrest without warrant after the CPFC lodges an FIR) [S. 14-AB]. It is punishable with imprisonment up to three years. [S. 14-AB] In case of default in payment of the employees contribution which has been deducted by the employer from the employees wages, the imprisonment will not be less than one year [S. 14]