Employee Provident Fund EPF - Meaning & Definition
Published by MBA Skool Team, Last Updated: May 25, 2013
What is Employee Provident Fund EPF?
Employee Provident Fund EPF is an employee benefit scheme generally prescribed by a statutory body of the government which provides facilities to the employees of an organization with regard to medical assistance, retirement, education of children, insurance support and housing.
In India, the Employees’ Provident Fund Organization (EPFO), which works under the Ministry of Labour and Employment, has the authority to mandate policies on EPF, pension and insurance schemes. The Employees' Provident Fund Scheme and Miscellaneous provisions Act, 1952 defined by EPFO- is applicable to every establishment (business/ not-for-profit) employing 20 or more persons (5+ in the case of cinema theatres) in the whole of India except Jammu and Kashmir.
As a part of EPF, the employer is expected to make a contribution of at least 12% of the basic pay (including the cost of living adjustment allowance and retention allowance) subject to a maximum of Rs 6,500 per month to the provident fund of every employee of the firm. An employee can withdraw the full amount at credit on the fund on retirement after attaining 55 years of age. However, an employee who has not attained the age of 55 years also has the provision to cash the balance on his provident fund under the following circumstances-
Termination of services
Retirement on account of permanent disablement
Migration for taking employment abroad
Hence, this concludes the definition of Employee Provident Fund EPF along with its overview.
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