The Ministry of Labour & Employment has issued four
notifications in August 2014 amending the provisions of the
following the schemes framed under Employees' Provident Funds
and Miscellaneous Provisions Act, 1952 ("EPF
(i) The Employees' Provident Funds Scheme, 1952
(ii) The Employees' Pension Scheme 1995
("Pension Scheme"); and
(iii) The Employees' Deposit-Linked Insurance Scheme, 1976
The amendments have come into force with effect from 1 September
2014. Some of the relevant amendments are summarised below.
Increase In Minimum Pay From Rs. 6,500 To Rs. 15,000
The existing wage limit on which provident fund
("PF") contributions are payable by the
employer and employee on the employee's pay has been increased
from Rs. 6,500 to Rs. 15,000.
Accordingly, the PF contribution payable by an employee, and in
respect of him, by the employer, is now limited to 12% of the
employee's monthly pay1 of Rs. 15,000.
An employee whose pay exceeds Rs. 15,000 per month shall be
considered to be an 'excluded employee'.
Consequently, an employer would now be required to make
mandatory PF contributions in respect of all employees whose pay is
Rs. 15,000 or less (as opposed to Rs. 6,500 or less). This
amendment has widened the ambit of employees who would now be
covered under the EPF Act.
Corresponding changes have been made to the Pension Scheme and
EDLI scheme whereby the references to the monthly pay of Rs. 6,500
have been increased to Rs. 15,000.
Minimum Amount Of Pension Payable
The Pension Scheme has been amended to provide that the minimum
pension or relief payable to any existing or future member or, in
case of the member's death, to his widow, shall not be less
than Rs. 1,000 per month for the financial year 2014- 15.
The minimum 'monthly children pension' (payable in case
of death of the member) for each child has been increased from Rs.
150 to Rs. 250 for the financial year 2014-15.
A minimum 'monthly orphan pension' which is payable
where a deceased member is not survived by any widow or where the
pension is not payable to the widow (e.g. in case of her
remarriage), has also been increased from Rs. 250 to Rs. 750 for
the financial year 2014-15.
Computation Of Pensionable Salary & Pension Fund
The Pension Scheme has been further amended to provide that
pensionable salary (i.e. the salary based on which pension is to be
computed) will be the average monthly pay drawn during the
contributory period of service in the span of 60 months (originally
12 months) preceding the date of the exit from membership of the
The pensionable salary shall be determined on a pro-rata basis
for the pensionable service up to 1 September 2014, subject to a
maximum of Rs. 6,500 per month and for the period thereafter
subject to the maximum of Rs. 15,000 per month.
Existing members as on 1 September 2014 who (at the option of
the employer and employee) had been contributing to the pension
fund on salary exceeding Rs. 6,500 may continue to contribute on
salary exceeding Rs. 15,000 if the employer and employee jointly
exercise an option to do so. This option is to be exercised within
6 months from 1 September 2014 failing which it will be deemed that
such member has opted not to contribute over the wage ceiling and
the contributions to the pension fund made over the wage ceiling
shall be diverted to the provident fund account of such member
along with interest as declared under the PF Scheme from time to
Amendment To The EDLI Scheme
Under the EDLI in case of death of an employee (in respect of
whom PF contributions have been made), persons entitled to receive
PF accumulations of the deceased are also entitled to receive an
additional amount under the EDLI Scheme
("Benefit") equal to the higher of the
average balance in the account of the deceased in the preceding 12
months or during the period of his membership2. The EDL Scheme has
now been amended to provide that the Benefit is to be increased by
1 Pay includes basic wages with dearness allowance,
retaining allowance, if any, and cash value of food concessions
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On 31 December 2015 the President gave his assent to certain amendments to the Payment of Bonus Act, 1965. The amendments have increased the wage threshold for determining applicability of the Act from INR 10,000 to INR 21,000 per month.
The Payment of Bonus Act, 1965 provides for the payment of statutory bonus to eligible employees. The bonus payable is to be determined on the basis of profits or on the basis of production or productivity of the establishment.
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