What is EPF?
The Employees Provident Fund Organization (EPFO) is a non-constitutional body that promotes employees to save funds for retirement. The Organization is governed by the Ministry of Labour and Employment, Government of India and was launched in 1951.
The schemes offered by the organization cover Indian workers and international workers (from countries with whom the EPFO has signed bilateral agreements).
EPF is the main scheme under the Employees Provident Funds and Miscellaneous Act, 1952. The Employee and Employer each contribute 12% of the employee’s basic salary and dearness allowance towards EPF.
OBJECTIVES OF EPFO
Given below are the main objectives of EPFO:
- To ensure every employee has only one EPF account.
- Compliance must be facilitated easily.
- Make sure organizations follow all the rules and regulations set up by the EPFO on a regular basis.
- To ensure that online services are reliable and to make improvements in their facilities.
- For all member accounts to be accessed online easily.
- Claim settlements to be reduced from 20 days to 3 days.
- Promotion and encouragement of voluntary compliance.
UNIVERSAL ACCOUNT NUMBER
All subscribers of EPF can access their PF accounts online and perform functions like withdrawal and checking EPF balance. The Universal Account Number (UAN) makes it convenient to login to the EPFO member portal.
The UAN is a 12 digit number allotted to each member by EPFO. The UAN of an employee remains the same even after he/she switches jobs. In the event of a job change, the member ID changes, and the new ID will be linked to the UAN. However, employees must activate their UAN in order to avail the services online.
BENEFITS OF EPF
Given below are the benefits of EPF:
- It helps in saving money for the long run.
- There is no requirement to make a single, lump-sum investment. Deductions are made on a monthly basis from the employee’s salary and it helps in saving a huge amount of money over a long period.
- It can help an employee financially during an emergency.
- It helps in saving money at the time of retirement and helps an individual maintain a good lifestyle.
ELIGIBILITY CRITERIA OF EPF:
The eligibility criteria in order to join the EPF scheme are mentioned below;
- It is mandatory for salaried employees with an income upto Rs 15,000 can also register for an EPF account.
- As per law, it is mandatory for organizations to register for the EPF scheme if they have more than 20 employees working for them.
- Organizations with less than 20 employees can also join the EPF scheme on a voluntary basis.
- Employees who earn more than Rs 15,000 can also register for an EPF account. However, they must get approval from the Assistant PF Commissioner.
- The whole of India (expect the states of Jammu and Kashmir) can benefit from the provisions in the EPF scheme.
EPF is one of the main platform of savings in India for nearly all people working in Government, Private or Public sector organizations. Registration has to be done within one month from the date of hiring of 20 employees. Any delay may result in a penalty. If you have any doubt you can contact companysuggestion.