Pension Scheme

 

Employee’s Pension Scheme

Applicability:

Employer – Provident Fund Act applies to factories and other notified establishments employing 20 or more persons. Once an establishment is covered, its departments and branches, wherever they are, are covered. Once establishment is covered, it continues to get covered even if employment goes below 20.

Employee – Every employee employed in or in connection with the work of a factory or other establishment to which this scheme applies, other than an excluded employee (an employee who, having been a member of the Fund, withdrew the full amount of his accumulations in the Fund or an employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds Rs. 6,500/- pm), shall be entitled and required to become a member of the Fund from the day this paragraph comes into force in such factory or other establishment.

Employees’ Pension Fund:

Out of the contributions payable by the employer of 12% / 10% of the employee’s pay, 8.33% of the employee’s pay shall be remitted by the employer to the Employees’ Pension fund and the balance to Employees Provident Fund Scheme. The Central Government shall also contribute at the rate of 1.17 % of the pay.

Returns

Every employer shall send to the Commissioner within twenty five days of the close of each month a return in respect of the employees leaving service of the employer during the preceding month. If there is no employee leaving service of the employer during the preceding month the employer shall send a “NIL” return.

Exemption

If the employees of the establishments are either members of any other pension scheme or proposed to be members of a pension scheme wherein the pensionary benefits are at par or more favourable than the benefits provided under this Scheme are exempted.

To know more about labour laws.