Contribution to Pension Fund on salary exceeding 15000 per month. Option to be exercised by employee and employer jointly – EPFO

Contribution to Pension Fund on salary exceeding 15000 per month. Option to be exercised by employee and employer jointly – EPFO

EMPLOYEES’ PROVIDENT FUND ORGANISATION

Letter No. Pension-1/12/33/EPS Amendment/96/18592                                                                      07-10-2016

To
All ACCs (Zonal Office)
All Regional P.F. Commissioner (In-Charge of Regions)
All Officers -In- Charge of SROs

Sub: Contribution to pension fund on salary exceeding Rs. 15000 per month with effect from 1st September 2014- reg.

Sir/ Madam,

Kind attention is invited to the notification no. GSR- 609 dated 22.08.2014 through which following provisions were inserted in sub Para 4 of Para 11 of Employees Pension Scheme 1995 (determination of pensionable salary). The provisions of Para 11 (4) is reproduced below for your ready reference :-

“The existing members as on the 1st day of September, 2014, who at the option of the employer and employee, had been contributing on salary exceeding six thousand and five hundred rupees per month, may on a fresh option to be exercised jointly by the employer and employee continue to contribute on salary exceeding fifteen thousand rupees per  month:

Provided that the aforesaid members have to contribute at the rate of 1.16 per cent or salary exceeding fifteen thousand rupees as an additional contribution from and out of the contributions payable by the employees for each month under the provisions of the Act on the rules made there under :

Provided further that the fresh option shall be exercised by the member within a period of six months from the 1st day of September, 2014:

Provided also that the “period specified in the second proviso may, on sufficient cause being shown by the member, be extended by the Regional Provident Fund Commissioner for a further period not exceeding six months:

Provided also that if no option is exercised by the member within such period (including the extended period), it shall be deemed that the member has not opted for contribution over wage ceiling and the contributions to the Pension Fund made over the wage ceiling in respect of the member shall be diverted to the Provident Fund account of the member along with interest as declared  under the Employees’ Provident Fund Scheme from time to time.”

In order to examine the compliance status by the field offices with respect to the above notification and modification, details in respect of employees contributing to the pension fund exceeding salary of Rs.15000 per month have been analysed. Following facts have surfaced on analysis of the details as above for the month of April and May 2016.

From the above report it is presumed that 1.16% of salary exceeding Rs.15000 as an additional contribution to the pension fund is not being made by the establishments in respect of concerned employees in more than 90% of such cases for the sample month April and May 2016. Details of such employees related to concerned ROs/SROs and establishments are being forwarded in soft copy as attachment to this letter through e-mail.

All RO/SROs are therefore advised that each case of contribution on salary exceeding Rs.15000 per month be examined for compliance of the scheme provisions and that Para 11 of the EPS 1995, both in respect of additional contribution of 1.16% and also regarding submission of fresh option for contribution on salary exceeding Rs.15000 per month as per provisions of Para 11(4) of the EPS 1995.

Status report in respect of such employees in each office and action taken by these offices for strict compliance of Para 11{4) by EPS 1995 must be submitted to Head Office within 15 days through Add I. Central P.C. Commissioner of the Zone.

Addl. Central P.F. Commissioners (Zone) are requested to monitor the status and action taken by the offices under their jurisdiction and submit a consolidated report within 15 days and also to monitor the desired actions to be taken in such cases

Yours faithfully,

(S.K.Thakur)
Add.Central P.F.Commis sioner-I(Pension