Employees Provident Fund Organization –(EPFO)


The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is an important piece of legislation by the Parliament of India for providing social security benefits to the workers. The Employees 'Provident Fund Organization which administers the Act, provides:

Salient Features:

  • A compulsory saving scheme for old age/retirement/exigencies through the Employees' Provident Fund Scheme, 1952
  • A Pension Scheme for the members on their superannuation/retirement/permanent disability and for widow/children/dependent parents/nominee in case of death of the member.
  • A deposit linked Insurance Scheme for the dependents of the deceased member if he/she had died while in service.
  • The department allots a registration number to such establishments to which the Act applies and the employers of such establishments are required to remit the PF related dues in respect of their employees so that the social security benefits as mentioned above can be extended to the employees.


Every establishment which is a factory engaged in any industry specified in schedule 1 and in which 20 or more person are employed. Any other establishment employing 20 or more persons which central government may by notification, specify in this behalf. Any establishment employing even less than 20 persons can be covered volunatarily under section 1 (4) of the act.


Employees covered enjoy a benefit of social security in the form of an attachable and unwithdrawable (except I severly restricted circumstances like buying house, marriage, education etc.). Financial nest egg to which employees and employers contribute equally throughout the covered persons employment. This sum is payble normally on retirement or death. Other benefits include employees pension scheme and employees deposite linked insurance scheme.

PF Scheme

The definition of ‘excluded employee’ has been amended whereby the members drawing wages exceeding INR 15,000 per month are excluded from the provisions of the PF Scheme. Accordingly, the wage ceiling for an employee to be eligible for the PF Scheme has been increased from INR 6,500 per month to INR 15,000 per month.

Pension Scheme

  • New members (joining on or after 1 September 2014) drawing wages exceeding INR 15,000 per month shall not be eligible to voluntarily contribute to the Pension Scheme.
  • The maximum pensionable salary for the purpose of determining the monthly pension has been revised from INR 6,500 to INR 15,000 per month.
  • The pensionable salary shall be calculated on the average monthly pay for the contribution period of the last 60 months (earlier 12 months) preceding the date of exit from the membership.
  • The monthly pension for any existing or future member shall not be less than INR 1,000 for the financial year 2014-15.

Insurance Scheme

  • The contribution payable under the Insurance Scheme shall now be calculated on a monthly pay of INR 15,000, instead of INR 6,500.
  • In the event of death of a member (on or after 1 September 2014), the assurance benefits available under the Insurance Scheme has been increased by twenty percent (20%) in addition to the already admissible benefits.

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