Basic details – Employee Provident Fund

Employee’s Provident Fund Scheme :

”Provident Fund” is A compulsory, retirement savings scheme managed by
government in India and some other countries. provident fund is a form of
social safety plan intended in making the working class people to contribute a
portion of their salaries and employers must contribute on behalf of their
workers. The money in the fund is would be an assistance to retirees, or in
some cases to the disabled who cannot earn their bread and meal.

Meaning -EPF :
provident fund was created with a purpose of providing financial security and
stability to people at the time when they are no longer can earn their own
bread and meal. Generally one has to contribute in Provident fund account
when he / she commence his career as an employee in an organization either
public or private any sector but his employer should be covered by the
statutory provisions of EPF Act. The contributions are made on a regular
basis. It’s main motto is to assist employees to save a portion of their salary
every month, which in turn can be used for the rescue of employee and his
dependents from an unforseen circumstance when the employee is temporarily
or no longer fit to work or at retirement.

Key focus is on :
1.medical assistance,
2.retirement,
3.education of children,
4. insurance support and housing.

Administration :
Employee Provident Fund is administered by the “Employees Provident Fund
Organisation (EPFO)” of India which is constituted accordingly as said in the
statue.

Applicability :
. An establishment with 20 or more workers in any one of the 180+ industries
as specified by EPF Act, should register with EPFO. As per the provision of
EPF Act 1952 ,12% of the Basic, DA, and cash value of food allowances has to
be contributed to the EPF account. Employer also should contribute the same
12% in addition to the administrative charges.

EPF can be further classified into :

1. Employee’s Provident Fund Scheme,
2. Employees’ Deposit Linked Insurance Scheme,
3. Employee’s Pension Scheme.