Last updated on December 28th, 2017 at 02:43 pm
The EPF refers to Employees Provident Fund. The EPF came into being with the enactment of the Employees Fund Scheme of 1952.The Employees Fund Scheme is also popularly known as the Employees’ Provident Fund and Miscellaneous Act of 1952.The act was carried out by a central board of trustees which in turn was comprised of the employees, employer as well as government officials. The board was assisted by the Employees Provident Fund organisation which works under the Ministry of labour and Employment.
Whenever a person joins an organisation he or she is provided with an Employees Provident Fund. Once an employee starts getting his or her salary a part of it contributed to their EPF account.
The EPFO refers to Employees Provident Fund Organisation. It was formed with the task of assisting the Central Board of Trustees. It was formed by the Employees Provident Fund and Miscellaneous Provision Act of 1952. It works under the administrative authority of the Ministry of Labour and Employment. The EPFO has its roots in the directive Principle of the state policy mentioned in part iv of the Indian constitution. The directive principles hold that the state in its full economic capacity will look after the education, employment, old age, sickness and disablement of the Indian work force.
The vision of the EPFO 2030 is to become a world class organisation having full coverage on social security of the employees across the country via Provident fund, pension and life insurance. Further, it also aims at implementing policies that benefit the social security structure. The mission statement of the organisation states its mission is provide an easy and a hassle-free service with minimum interface. Ensure services which are reliable and which are updated every month and provide easy and voluntary compliance.
The Employees Provident Fund and Miscellaneous Provision Act (1952)
The EPFO came into existence with the enactment of the Employees Provident Fund and Miscellaneous Act of 1952.This act lead to major transformation to the lives of the working class in Indian society. The act was administered by the Central Board of Trustees which was represented by the government, employers as well as the employees. The Central Board of Trustees was inturn assisted by the Employees Provident Fund Organisation which worked under the preview of Ministry of Labour and Employment.
The act was passed with the view of ensuring a retirement scheme that will also act as a saving deposit and a safety net for the working class at the time of emergency. At present, there are three are three schemes that are working under this scheme, they are the, Employees Provident Fund, the Employees Pension Scheme and the Employees Deposit Linked Insurance Scheme.
These three schemes come under the administrative control of the EPFO. Every organisation which employs more than 20 people in its payroll are required to register themselves with EPFO. The details of all the EPF nomenclature are given below:
EPF (Employee Provident Fund)
In 1951 an ordinance was passed for the establishment of a scheme that would look after the retirement years of the employees in India, it was named as the Employment Provident Fund Ordinance of 1951.Thus,with the passing of this ordinance the Employment Provident Fund and Miscellaneous Act was passed in 1952 that replaced the Employees Provident Fund ordinance of 1951.The Employment Provident Fund and Miscellaneous Act of 1952 is also called the Employees Provident Fund scheme. The EPF comprises of monthly contribution made by the employer as well as the employee. The benefit of investing in EPF is that amount of money that is contributed is tax exempted in accordance with section 80c of the Income Tax Act. Further, the interest earned on the EPF amount is also compounded every year. The employee contributes 12% of his or her salary and the employer contributes 3.67%.
EPS (Employee Pension Scheme)
The central government introduced the EPS for the purpose of providing pension to retiring people, to widow or widower of the pensioners. The employer contributes 8.33% to the Employees Pension Scheme every month.
It is a deposit linked insurance scheme. The EDLI acts as a safety net for the employee’s family in case of death, accident, illness of the member. All organisations which do not cover a group insurance scheme to its employees are required to contribute 0.5 % of the monthly salary to the insurance scheme.
Find more about the New Automatic Transfer Scheme of EPFO by clicking here.