Recovery of Provident Fund under EPF Scheme, 1952 – Reg

KENDRIYA VIDYALAYA SANGATHAN

18- INSTITUTIONAL AREA, SHAHEED JEET SINGH MARG,

New Delhi – 110016

Email ID:- kvsjcfin@gmail.com

Telephone No: 011-26858570 ext-(205)

F.No.1-1/2015/KVS/JC(Fin)

Dated: 16/06/2016

The Deputy Commissioner /Director,

Kendriya Vidyalaya Sangathan,

All Regional Offices/ ZIETs.

Sir/Madam,

Sub: Recovery of Provident Fund under EPF Scheme, 1952 – Reg.

With reference to the captioned subject, I am to forward herewith a copy of DO. Letter no.CAIU/011(33)2015/HQ dated 6th June 2016 which is self – explanatory.

The salient features highlighted by Sri. C.Chakraborty, Addl. Central Fund Commissioner-II, EPFO, New Delhi in his letter is reproduced hereunder:

1. The issue of coverage of contract workers under the EPF & MP Act, 1952 has been flagged as an area of top most concern by the Government of India.

2. Contractors claim huge amount towards EPF of contract workers from the Principal Employer (KVS) but either do not deposit it at all or deposit it partly, thus depriving these workers of Provident Fund, Pension and Insurance benefits.

3. As per Paragraph 30(3) of EPF Scheme, 1952, it is the responsibility of the principal employer to pay both the contributions payable by him in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

4. In their website www.epfindia.gov.in on the “establishment search option”, a provision is available to verify as to whether the agencies and contractors having Provident Fund Code numbers are regularly depositing Provident Fund contributions every month to check the compliance position of the agencies and contractors to the provisions of the Act and the Schemes framed there under to which the contracts are awarded by the department.

5. To bridge the gaps and with the view to make the system more robust, transparent and to reduce the cost of compliance for the employer, EPFO has launched a facility for the principal employers to register at the EPFO website the details of contract employers of each contract awarded, which can be viewed and updated at any time.

6. The Regional and Sub-Regional office will also take steps to secure compliance of employees engaged by the contactor towards Employees Provident Fund.

7. A representative can be deputed to contact the concerned Regional PF Commissioner of the Regional/Sub-Regional Office to know further methodology.

8. The details of the contract employers of each contract should be uploaded to facilitate compliance under EPF and MP Act, 1952.

It is requested that the contents of DO letter dated 6th June 2016 may be brought to the notice of all the Principals under your region and may also be noted at your end for compliance in letter and spirit.

Yours faithfully,

Sd/-

(M. Arumugam)

Joint Commissioner (Fin)

Source:http://kvsangathan.nic.in/GeneralDocuments/ann-17-06-16.pdf

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New EPF Rules to Come into Force after April 30

New EPF Rules to Come into Force after April 30

On Feb 10, 2016, the ministry of labour and employment made sweeping changes in the EPF rules restricting the withdrawal of EPF corpus. EPFO rules restricting withdrawal of employees’ provident fund will come into force after April 30.

New EPF Rules to Come into Force after April 30 – The government has deferred the implementation of the new rule till April 30, 2016.

EPFO rules restricting withdrawal of employees’ provident fund will come into force after April 30. This means that in case you are unemployed for 2 months or more and want to withdraw your full EPF you can do so only within the next 15 days. After that the withdrawal amount will be restricted and you will be able to get the full amount only when you turn 58.

On Feb 10, 2016, the ministry of labour and employment made sweeping changes in the EPF rules restricting the withdrawal of EPF corpus.

Hitherto, a member of EPFO could withdraw 100% of the accumulated corpus if unemployed for a period of 2 months or more. The accumulated corpus is a sum of employer’s contribution, employee’s contribution and the interest earned on them. Of course, the person needs to have accumulated some EPF in a previous employment to have a corpus to withdraw at all.

However, the new EPF rules have restricted the amount of withdrawal that a member can make. Under the new rule, a member after being unemployed for 2 months or more can withdraw only his own contribution and the interest earned on it. He can’t withdraw the corpus generated from the employer’s contribution along with the interest earned on it. A member in the Employees Provident Fund Organisation (EPFO) can withdraw the full Employee Provident Fund (EPF) corpus only after attaining the age of 58 years. So, if you are jobless for 2 months or more and wish to withdraw the full EPF corpus, you just have 15 days to get it out.

The government has deferred the implementation of the new rule till April 30, 2016. From May 1, till 58 years of age you can withdraw only your own contribution in EPF which equals 12% of your basic salary plus the interest if unemployed for 2 months or more. The employer’s contribution plus the interest accumulated will be withdrawable only once you attain the age of 58 years.

We consider a hypothetical scenario wherein a person after being employed for 20 years becomes jobless in the month of Jan, 2016. Assuming his basic salary as Rs 25000 per month for the whole period his own contribution in EPF would be Rs 3000 per month. If he contributes for 20 years, his own contribution of Rs 7.20 lakh (12%*25000*12*20) will yield him a corpus of ?approximately Rs 19 lakh which includes the interest on his contribution.

What’s more, the employer’s contribution of Rs 4.20 lakh will grow to Rs 11.50 lakh approximately which includes the interest component too. In this case, we have assumed an interest rate of 9% per annum compounded yearly for the whole period. As he became jobless in Jan, he is unemployed for a period of more than 2 months as on date.

Under the current rule, if he withdraws his EPF corpus before May 1, then he can withdraw the full corpus of Rs 30.5 lakh. However, if he doesn’t withdraw before May 1, he can take out his own contribution and interest of Rs 19 lakh even after this date provided he remains jobless. However, the remaining Rs 11.50 lakh can be withdrawn only after he reaches the age of 58 years. You can however, withdraw 90% of the employer’s contribution plus interest at the age of 57 years. Importantly, the erstwhile rule of zero interest on inoperative accounts was quashed from April 1. Hence the employer’s contribution lying idle in the EPF account till the age of 58 years will continue to earn interest.

Source: Economic Times

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Data of Members under Employees’ Provident Fund Organization (EPFO)

   Employees’ Provident Fund Organisation (EPFO) has date of birth details for more than 4 crore members out of a total members of 8.87 crore as on 01.08.2013. Web facility has been provided to the Employers to upload the date of birth details of all employees. Further, Field Offices of EPFO have been directed to ask Employers to upload these details.

   Providing Annual Statement of Accounts (Account Slips) to the members of EPF is already in place. Para 73(1) of the EPF Scheme 1952 lays down that a statement of account in respect of each member through his last employer to be sent after the close of each year.

   Besides, the following facilities have also been provided for the PF members to know their PF balance:

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Application of the provisions of Employees Provident Fund & Miscellaneous Provisions Act, 1952: Employees’ Pension Scheme, 1995 and Employees Deposit Linked Insurance Scheme, 1976 to Railways contracts.

Government Of India
Ministry Of Railways
(Railway Board)

No. 2012/CE-I/CT/O/22

New Delhi, Dated 14.12.2012.

Addressed To
(As per Mailing List ‘A’ Attached).

Sub: Application of the provisions of Employees Provident Fund & Miscellaneous Provisions Act, 1952: Employees’ Pension Scheme, 1995 and Employees Deposit Linked Insurance Scheme, 1976 to Railways contracts.

   1. Employees Provident Fund & Miscellaneous Provisions Act, 1952 (hereinafter called the ‘Act’) was enacted as a measure of social welfare legislation.

   2. The Contractors engaged in various contracts deploying workers across Indian Railways come under the purview of the Act. As per Section 1(3), read with Section 16 of the Act, being the principal employer, even though Indian Railways are not covered under the Act, the Contractors working with Indian Railways are covered under the provisions of the Act. The relevant provisions of the EPF Act and its Scheme on liabilities and duties of the principal employer are enclosed as Annexure-II.

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Investment by EPFO in Equities

   The Employees Provident Fund Organisation is not considering investment in equities as funds earning 12 per cent annually in the National Pension System.

   As on 31.10.2012, the total of Employees’ Provident Fund Organisation (EPFO) corpus invested in private sector is Rs. 26,896.54 Crore including Rs. 4.05 Crore investments in blue chip manufacturing companies.

   Employees’ Provident Fund Organisation (EPFO)ensure security of the capital contributed by the beneficiaries with risk free, consistent return on the same.

   This information was given by the Minister of State for Labour Shri K.Suresh in reply to a written question in the Rajya Sabha today.

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Amendment in Provident Fund Rules – Notification issued by Ministry of Labour and Employment.

MINISTRY OF LAROUR AND EMPLOYMENT
NOTIFICATION
New Delhi, the 5th October, 2012.

     G.S.R. 744(E).— In exercise of the powers conferred by section 5, read with sub-section (1) of section of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the Central Government hereby makes the following Scheme further to amend the Employees’ Provident Funds Scheme, 1952, namely: -

   1. (i) This Scheme may be called the Employees’ Provident Funds (Fourth Amendment) Scheme, 2012.

       (ii) It shall come into force on the date of its publication in the Official Gazette.

   2. In the Employees’ Provident Funds Scheme, 1952 (hereinafter, referred to as the principal Scheme), under paragraph 83 relating to special provisions in respect of International/Workers.

       (a) in paragraph 69 of the principal Scheme" as modified by para 6 of aforesaid paragraph 83, for sub-paragraph (4), the following sub-paragraph shall be substituted, namely: -

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Process of settlement of claims in view of declaration of rate of interest for the financial year 2011-12 — Regarding.

Employees Provident Fund Organisation
(Ministry of Labour & Employment, Govt. of India)
Bhavishya Nidhi Bhawan, 14-Bhikaiji Cama Place, New Delhi - 110066

No.:WSU/10(1)2011/Changes in MAP

Dated:15-03-2012.

To
All Regional Provident Fund Commissioners,
In-charge of the ROs/SROs

Subject:- Process of settlement of claims in view of declaration of rate of interest for the financial year 2011-12 — Regarding.

Sir,

   This is in reference to the Head Office circular No. Invest.1/3(2)/133/11-12-ROI/51350 dated 14.03.2012 (placed at Sl. No. 602 of ‘Office Orders & Circulars 2011-12’ on EPFO’s website) vide which rate of interest @8.25% pa. for the financial year 2011-12 has been conveyed. The IS Division has already released Application S/w Patch Ver 3.29.1” dated 15-03-2012 for the same.

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