| || ||Thread Tools||Search this Thread|
|1st February 2010, 12:54||#16|
Join Date: Mar 2007
Thanked: 22 Times
I was forced to join a startup when i lost my job in Mar 09. This startup is more than 70 employees in strength. I tried to get the employees to understand the importance of having a PF in their salary. however the employees or HR are unwilling to let go of the PF amount from their current salary. The senior mgmt is not putting its foot down and making it mandatory for everyone. I have PF accrued for over 10 yrs and I am being forced to withdraw it for want of better options.
|1st February 2010, 13:23||#17|
Join Date: Jan 2005
Thanked: 14,546 Times
|1st February 2010, 13:29||#18|
Senior - BHPian
Join Date: Jun 2007
Thanked: 143 Times
EPF run by the Employees' Provident Fund Organisation is a statutory requirement.
IF the employer provides equal or better options, the government can exempt an employer from ambit of EPF.
I would vote for teh EPF run by the EPFO, rather than empoyer because -
1. If you contribute for at least 10 years, AND
2. When you complete 50 years;
You get a pension, right now the minimum is Rs. 250/- per month. I work with lower economic strata of employees, and there are persons drawing 4 figure pensions. The pension is also commutable (means you can take a lump sum every N years with a proportional reduction in monthly pension).
As a matter of future financial safety, DO NOT OPT OUT OF EPF. You may be a careful safe driver, but you always insure your car. Consider EPF just like your car's insurance.
If you have contributed for 10 years to EPF, DO NOT withdraw the amount. Keep with the EPFO till you are 50, and opt for pension after that age. You continue contributing up to 60 years of age, with proportionate increase in pension. (kpbhat, this is for you).
It is compulsory for all establishments with more 10 employees.
I think the thread starter would be classified as a "Management" staffer and hence the option of not paying the EPF. The 24% reduction in basic is much more than employer's share of EPF contribution. This is very unethical.
Also, any person responsible for employment is criminally liable if the employer does not contribute to EPF.
I am no expert in EPF, and the info above is gleaned from people I interact with, and I frequently depend on EPF papers to test veracity of applications before me (I am in Government service).
Last edited by BaCkSeAtDrIVeR : 1st February 2010 at 13:30.
|1st February 2010, 13:31||#19|
Join Date: May 2004
Thanked: 7,692 Times
I have a feeling the offer will be a consultant/contractor position. To show the take home better you are offered this break up.
|1st February 2010, 13:53||#20|
Senior - BHPian
Join Date: Jun 2004
Location: Navi Mumbai
Thanked: 127 Times
Thanks for all the replies guys, i am sure this will also benefit others.
|1st February 2010, 14:01||#21|
Distinguished - BHPian
Join Date: Feb 2004
Location: Mid West
Thanked: 2,501 Times
@ Samurai - My first company also did not have PF & it was only later that they gave it as an option. Now though it seems they have made it mandatory. The point is there are many companies with strengths of much more(10 times & more) than the 20 employees & still dont give PF.
I dont know how they do it.
|1st February 2010, 14:04||#22|
Senior - BHPian
Join Date: Sep 2008
Thanked: 1,253 Times
Exemptions under the Schemes
An individual member getting Provident Fund benefits on par with or better than statutory provisions can apply for exemption in Form 1 under para 27.
Employers can apply for exemption in respect of a class of employees getting similar or better benefits than the statutory P.F. Scheme under P. 27A subject to the conditons governing grant of exemption.
The employer can seek exemption from P.F. Scheme for the entire establishment if the majority of the employees also consent for exemption, subject to certain conditions governing grant of exemption and certain formalities.
Employer can avail exemption for the establishment as a whole, with the consent of majority of employees, if an alternative pension scheme is formulated by the establishment with benefits either on par with or superior to the EPS ’95 and subject to certification of the viability and long sustenance of the scheme by an independent qualified actuary and satisfying the other conditions prescribed governing the grant of exemptions.
There is no provision for exemption of individuals or for class of employees.
The establishment can get exemption from the EDLI Scheme, if the employees therein are entitled for a benefit in the nature of insurance whether linked to their P.F. deposit or not and without paying any contributions.
Instead of letting your EPF of 10 years go to waste, you can open a PPF(Public Provident Fund) account.
This can be done at any Nationalized bank and also your local Post Office. Though it is better done at the bank. Your previous employer will issue a letter verifying that you had an EPF account with them and a statement of accounts and the entire proceeds with the accrued benefits will be carried forward to your new PPF. You can deposit monies to this account at your convenience subject to the maximum of INR70,000/- every year and continue to enjoy all the benefits.
At a later time if you were to switch jobs to a company with PPF you can do a reverse transfer with all benefits.
|1st February 2010, 16:13||#23|
Join Date: Jan 2005
Thanked: 14,546 Times
|1st February 2010, 23:07||#25|
Join Date: Dec 2006
Thanked: 36 Times
When headcount of my previous employer reached 20, they decided to opt in for PF, but the contributions were Rs 780 from each party, and both amount were deducted from our salary (so the CTC remained the same). I think an employee could opt for contributing more (till actual 12%) but employer's contributions will be limited to 780/- which I think is the bare minimum requirement to be on the right side of the law.
But you may not want to base the decision whether to work for them on their PF policy. Maybe other factors are stronger (your growth opportunities, environment, team etc).
Last edited by kousik : 1st February 2010 at 23:12.
|2nd February 2010, 16:18||#26|
Join Date: Oct 2007
Thanked: 13 Times
My Two cents,
the Rs.780 mentioned in the previous posts is actually 12% of Rs.6500 which is the minimum pay after which PF kicks in. A person drawing less than Rs.6500 does not fall under PF's perview. And as already been shared here, an employee can choose to contribute more than the Rs.780, but in most cases the employers restrict themselves to contributing this amount which we know is the bare minimum.
As about ESI, as far as i know, for every employee drawing less than Rs.10,000, the employer is liable to contribute towards ESI.
While i am no expert in this domain, these are just some inputs i have learnt recently.
|Thread Tools||Search this Thread|
|Thread||Thread Starter||Forum||Replies||Last Post|
|The "Provident Fund" Thread||nirmalts||Shifting gears||620||19th January 2018 20:47|
|Help needed for fund raising||serious_maniac||Shifting gears||1||22nd November 2013 09:44|
|Fiat India Obtains New Credit Line To Fund Major Production Expansion||sanjaymugur||The Indian Car Scene||8||5th October 2012 22:56|
|Need to get a paint job and Suspension job in Pune for my Santro||vinit.merchant||Modifications & Accessories||1||16th May 2008 12:52|