Learn about EPFO & ESIC

Introduction to EPF (Employee Provident Fund) – Part 1

What is EPFO (Employee Provident Fund Organisation)?

The Indian government established the Employees' Provident Fund Organisation (EPFO) as a statutory entity. Its primary goal as the nation's largest social security agency is to help people save money for retirement, among other things. Established in 1951, EPFO is governed by the Ministry of Labour and Employment.

Function of EPFO

In addition to providing services, EPFO is acting as both a regulator overseeing the act's implementation and a service provider. Its primary duty is to supply retirement benefits to both government and private sector workers. In general, it handles claims settlement, personal account maintenance, pension plan payment control, and other tasks. Additionally, EPFO carries out the following duties:

  • The Regional Committee's Purposes Under EPFO
  1. To provide the fund members with the yearly account slips
  2. Fulfills the role of expediting the settlement of claims
  3. Accelerate the progress quickly.
  4. Monitor the status of the Provident Fund donations' recovery
  • The Executive Committee's Purposes Under EPFO
  1. Establishing Sub-Regional Establishments
  2. Establishing new areas and modernizing the existing ones
  3. Establish work standards for all organization officers and employees.
  4.  Recognize plans for acquiring property, buildings, etc.

Scheme Under the EPF Act

The Central body of Trustees (EPF), a tripartite body, is responsible for overseeing the Act and all of its programs. Employers, employees, and representatives of the Central and State governments make up the board. The Indian government's Ministry of Labour and Employment serves as the board's chair. Three programs are run by the Central Board of Trustees (EPF).

Benefit of Employees’ Provident Fund 1952

  1. Employees can take benefits and withdraw the PF in case of retirement, medical care, Unemployment (after 2 months), etc.
  2. Saving for retirement or unemployment.
  3. Good interest Rate in 2023-24 interest rate 8.15%
  4.  Interest is tax-exempt
  5. 80C deduction on PF Contribution (No tax up to  1.5 Lac and no tax on interested)

Benefit of Employees’ Pension Scheme 1995

  1. The member is eligible for a lifetime pension, which he or she can also leave to heirs upon death.
  2. Make contributions for a minimum of ten years.
  3. Begin receiving a pension at age 58.
  4. The money accumulated in EPS may be withdrawn if the employee does not finish ten years of service.
  5. No interest in contribution.
  6. The member is eligible for a lifetime pension, which he or she can also leave to heirs upon death.

Benefit of Employees’ Deposit Linked Insurance  Scheme 1976

  1. EDLI Provides Life Insurance to cover all working PF members.
  2. In case of death dependent member of the family gets a lump sum amount of compensation min 2.5 Lac & up to 7 Lac

What is EPF (Employee Provident Fund)?

The Employee Provident Fund (EPF) is a retirement benefits program accessible to all employees who receive a salary. The Employees Provident Fund Organisation of India (EPFO) is in charge of managing this fund; by law, any business with more than 20 employees must register with the EPFO. It's a savings platform that assists workers in setting aside a portion of their monthly pay for retirement or in the event that they become incapacitated.

A provident fund is a welfare scheme for the benefit of the employees. Both the employer and the employee contribute a portion of the funds under this scheme, but the entire amount is deposited by the employer. The employee's portion was subtracted by the employer from their salary. The employees' PF accounts are also credited with the interest received on this investment. If certain requirements are met, the employees receive the cumulative amount when they retire

Benefits of EPF

The following are the EPF scheme's benefits:

  1. Future savings: Through the EPF program, people can set aside money for the future.
  2. Easy deductions: Monthly salary deductions are taken from the employee's account, rather than a big one-time payment. This enables large savings over a longer time frame
  3. Emergency financial support: Employees may receive emergency financial help through the EPF plan.
  4. Retirement savings: By taking part in the EPF program, people can save money for their later years and guarantee a decent existence.

Eligibility Criteria of EPF

Eligibility Criteria for Employee

The following are the EPF eligibility requirements:

  1. Any business that employs more than 20 people is required by law to register with the Employees' Provident Fund Organisation of India. 
  2. Businesses with less than 20 workers have the option to voluntarily sign up for the Employees' Provident Fund. 
  3. Every worker who receives a wage is qualified for EPF.
  4. Additionally, EPF registration is mandatory for any employees making less than ₹15,000.
  5. Employees making over ₹15,000, however, are still free to choose to remain in the EPF program.

Eligibility Criteria for Employer

  1. The employer is required to register for EPFO for employees of 20 or more.
  2. They can opt out of the mandatory contribution if they have less than 20 people in the organization. 
  3. The organization can also request for exemption if the majority of the employees vote for employee PF exemption.

Objectives of EPF

The following are the EPFO's main objectives:

  • To guarantee that every worker has a single EPF account.
  • Simplifying compliance is crucial.
  • Make sure that businesses consistently abide by all of the EPFO's rules and regulations.
  • to expand their infrastructure and ensure the reliability of internet services.
  • Every member account ought to be simple to access on the internet.
  • There will be a reduction in claim settlement periods from 20 to 3 days.
  • promotion and encouragement of voluntary compliance.

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