Contribution To The Employee Pension Scheme

Dear members,

This regards the modifications made to the Employee Provident Fund Scheme (EPF) and the Employee Pension Scheme (EPS) in September 2014. I have some questions -

1. Can the employer contribution to EPF exceed 12% of Rs. 15,000 per month (i.e., Rs. 1,800 p.m.)? My current organization has this policy. In my last organization, it was 12% of the actual basic salary.

2. I left the workforce in June 2013 for higher studies. I had been a member of EPF/EPS for approximately 2.75 years (After excluding time spent in a company with no PF). Can I continue as a member of EPS? I rejoined the workforce in May 2015.

This article - http://www.business-standard.com/article/pf/new-pf-rule-may-lower-take-home-pay-114090600767_1.html says that a member of EPF before September 2014 can continue as a member of the EPS.

This set of slides http://www.slideshare.net/GreytipOnline/pf-revised-wage-ceiling-limit-and-its-impact talks about employees who have "joined" before September 2014. Does it refer to the current job, or membership of EPF/EPS?

Could someone refer me to an authoritative document (if one exists)?

Thanks in advance,

Rahul

Dear Rahul,

I would like to reply to your query point by point regarding the modifications made to the Employee Provident Fund Scheme (EPF) and the Employee Pension Scheme (EPS) in September 2014. I have some questions:

1. Can the employer contribution to EPF exceed 12% or Rs. 15,000 per month (i.e., Rs. 1,800 p.m.)? My current organization has this policy. In my last organization, it was 12% of the actual basic salary.

Reply: It depends on your present employer if they can contribute on the full basic. If you want more, it can be 24% of the complete basic from both sides, with 12% as PF and 12% as VPF. If your employer does not want to contribute more, you can contribute 12% PF on the full amount and 12% VPF on the full amount, letting the employer pay only Rs. 1,800.

2. I left the workforce in June 2013 for higher studies. I had been a member of EPF/EPS for approximately 2.75 years (excluding time spent in a company with no PF). Can I continue as a member of EPS? I rejoined the workforce in May 2015.

Reply: You will remain a member of EPS if you have not withdrawn your contribution from your previous employer. The amount from your previous employer can be transferred to your present employer's account by submitting Form 19.

The article "New PF rule may lower take-home pay" says that a member of EPF before September 2014 can continue as a member of the EPS. The slides "PF revised wage ceiling limit and its impact" discuss employees who have "joined" before September 2014. Does this refer to the current job or membership of EPF/EPS?

Please refer to the EPF Act along with the scheme. Once you become a member of the scheme, you will remain a member of the scheme regardless of where you work, provided you have not withdrawn your contribution.

Could someone refer me to an authoritative document (if one exists)?

Thanks in advance,

Rahul