Tuesday, 2 September 2014

Employees Provident Fund and Miscellaneous Provisions Act 1952: Authorizing employers to maintain provident fund account and Transfer of Accounts

Authorizing employers to maintain provident fund account: Section 16A
If an employer has 100 or more employees and the employer and majority of employees make an application to the central govt (PF commissioner) then the employer is authorized to maintain his own provident fund. Employer will create a trust and trust will manage the fund.
Permission will be given to employer only if the employer has not committed any default in last three years.
The employer will create a trust and the trust will maintain accounts as per the terms and conditions imposed by the government.
The Employees Provident Fund   trust of employer will manage the Employees Provident Fund contributions and when the employee retires then the trust will make the payment to the employee.
The Employees Provident Fund trust is not allowed to be made by the employers having less than 100 employees.

Transfer of Accounts: Sec 17A
If an employer has a provident fund and his employee leaves the employment and join s new employment then in the new employment if he has a anew provident fund then the provident fund balance of employee will be transferred to new employment if the desires however if the employee does not want to transfer the fund to the new employer then the amount will be withdrawn and the ne provident fund will be started from the very beginning. Following are the circumstances:
  • If Pf act is applicable to both the establishments:
  • Then is the employee desires provident f will be transferred
  • If the law is applicable to earlier establishment but it is not applicable to subsequent establishment then also provident fund will be transferred to new establishment if the employee desires. This is done only is the earlier business maintains its own pf.
  • If the provident fund act is applicable to one undertaking and it is not applicable to other undertaking then the employee always gets a choice to transfer the balance or withdraw the same.

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