Employees Provident Fund & Miscellaneous Provisions Act (EPF & MP Act) 1952 is an important piece of labour welfare legislation enacted by Parliament to provide social security benefits to the workers. Some important provisions of Employees & Miscellaneous Provisions Act 1952 (as on 2012):-
- The Act and scheme provide for 3 type of benefits (1) EPF (2) Pensionary Benefit to employees and family members & (3) Insurance Coverage.
- The members (workers/employees), who join the company are covered under the purview of the act has to remit contribution from his Basic Salary @12% through their employer & the employer will contribute the same by diverting 3.67% to Employees Provident Fund & balance 8.33% to Pension Fund.
- The employer has to pay equal contribution along with admn. charges @ 1.10% of the total salary and inspection charges @0.05%
- Members, who are drawing basic wages upto 6500/-, will be covered under Provident Fund by contributions both by employees/workers and the employer-company.
- Over and above basic wages / salary of Rs.6500/-, it is at the discretion of employer to share their contribution to the member's PF account though employees/workers will have to contribute their share to the PF Account.
- The contribution deducted from members' salary by the employer has to be remitted to EPF Organisation by 15th of succeeding month for the preceeding month salary/wages. EPFO (Employees Provident Fund Organisation) will pay interest @ 8.25% (as on 2012) for the amount accumulated every year till it is withdrawn on retirement.
- If the member dies, while in service, the family of the deceased member will get the insurance benefit and pension benefits i.e. widow pension and children pension up to children's age of 25 years.
- Member can change his job and work with any number of establishements till the age of 58 years..
- Any member, who has rendered continuous service of 10 years, will be eligible for pension.
- Full pension will be payable at the age of 58 years of retirement.
- Reduced pension is eligible at the age of 50 years by deducting the 4% of the actual pension payable.
- On member's death, Widow & Children Pension will be payable.
- Minimum pension will be payable Rs.450/- to the widower & to the children Rs.250/-, if the member dies while in service.
- If the pensioner dies, widow is eligible to receive the pension and no children pension will be payable. 2 children will be eligible for children's pension up to the age of 25. If children get married before 25 years of age, no pension will be payable to them.
- Maximum pension of Rs.2500/- will be payable to pensioner.
- Insurance will not be payable to the family member if the member dies after leaving the service.
- If employer fails to remit the contribution, deducted in members salary will land in trouble and settlement cannot be made to the member/pensioner easily.
- If the employer fails to remit the contribution by 15th of every month, penal damages will be initiated against the employer.