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Some companies have formed their own PF trusts to manage the contributions of employees instead of sending them to the EPFO. These companies have obtained an exemption from EPFO to enable them to do this. Hence they are called exempted establishments in EPFO. Private PF trusts function according to the same rules as the EPF and members are allotted UANs (Universal Account Numbers). But passbook of employees of exempted trust is not available on the EPF website/Umang. There are more than 1000 such companies in India large companies like TCS, Wipro, Hindustan Unilever (HUL), Reliance and public sector organisations like Bharat Heavy Electricals (BHEL).   This article talks about EPF private trust, How to find if your Company runs EPF trust, Talks about features of EPF Private Trust,EPF Private Trust and UAN, Transfer from EPF Private trust to Unexempted EPFO ie Regional EPFO.

EPF Trust or EPF Exempted Establishments

As we know the Employees Provident Fund actually consists of EPF, EPS(Employee Pension Scheme) and Insurance EDLIS(Employees Deposit Linked Insurance Scheme). Distribution to EPF,EPS and EDLI remains the same for exempt and unexempt as shown in the table below. Our article Basics of Employee Provident Fund: EPF, EPS, EDLIS explains it in detail.

The Government has permitted employers/companies to establish and manage their own private PF schemes, subject to certain conditions prescribed under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. These trusts are regulated by the Employees’ Provident Fund Organisation (EPFO). These private EPF trusts are required to seek approval under the Income-tax Act, 1961 for employees to get tax benefits.  There are over 1,500 private Provident Fund (PF) trusts, with an estimated corpus of Rs 1 lakh crores and a membership of 50 lakh employees, which are managing the accounts as well as retirement fund of their workers. Companies like Infosys,TCS, Accenture have their Private PF Trust.   

Employee of Company with EPF Exempted Trust

An employee working in company with EPF Trust has to realise that

  • Though the employees of companies with EPF trust are allotted UAN and Provident Fund number or Member Id. They have limited use of UAN website. They cannot do the online withdrawal from UAN website.
  • The employees of companies with EPF trust cannot see their passbook on EPF website with PF and Pension amount on the epf website as the employer or Private Trust does not deposit money to EPFO. The Company provides them with this information through payslips, company own website.
  • If an employee has an EPF account with exempted or unexempted organization then he can transfer this account to Trust on joining a company with EPF Trust.
  • If the employee leaves the company which has EPF trust he needs to withdraw only from the company which maintains the trust.
  • If the employee joins another company then he can transfer his PF from EPF trust to another EPF trust or to EPFO depending on his new employer.

Roles and Responsibility of EPF Exempted Trust

EPF Private trusts are formed by firms that manage the provident fund and PF accounts of their workers themselves.The members of these trusts enjoy income tax and other benefits at par with EPFO subscribers. The PF Trust may frame their own rules and regulations for the maintenance of PF accounts but such rules and regulations are supposed to be based on relevant PF rules.

  • Such companies who seek exemptions and create EPF Private Trusts are called exempted establishment.
  • About 1,500 companies have been granted exemption by EPFO to maintain their own EPF trusts such as Infosys, TCS, BOSTON CONSULTING GROUP (I) PVT LTD
  • EPF Trusts opens and maintains PF accounts of the employees. 
  • The employees of companies with EPF trust are allotted UAN and Provident Fund number or Member Id.
  • It has to give interest to the members at rate declared by the EPFO every financial year.
  • However, the pension or EPS is payable only by the EPFO. So EPS still needs to be submitted to EPFO.
  • EDLI may be continued with EPFO. If the employer provides equal or better benefits, the exemption may be granted in lieu of EDLI also.
  • Pays administrative charge of 0.18% instead of regular 1.1 %. This 0.18% charge is to be remitted as inspection charges.
  • Issues annual accounts information to the members.
  • Disburse the amount of PF accumulations to the members on death, retirement, resignation etc.
  • Pay the Deposit Linked Insurance benefits to the members’ nominees in the event of the death of the members.
  • Submit periodical returns/report to the EPFO for the accounts maintained by it.

Why do companies go for EPF Private Trust?

  • The private EPF Trust seems to be more appealing as money remains with the in-house trust formed by the employer.
  • Many of these companies have a large number of employees(ex Infosys, TCS) so it becomes easier and faster for EPF trust to handle settlement of employees claims on retirement/ resignation faster.

EPF Trust and EPF, EPF Contributions

Distribution to EPF,EPS and EDLI remains the same for exempt and unexempt as shown in the table below

Scheme Name Employee contribution Employer contribution
Employee provident fund 12% 3.67%
Employees’ Pension scheme 0 8.33%
Employees Deposit linked insurance 0 0.5%
EPF Administrative  charges 0 1.1% for Unexempt

0.18% for Exempt

EDLIS Administrative charges 0 0.01%

How to find if your company is an exempted trust

You need to find Exemption Status. if Exemption Status is unexempted then your EPF contributions are with Regional EPFO office. If the status is exempted then the EPFO is maintained by a private trust.  Our article How to find your employer’s EPFO office and EPFO office Phone Numbers explains it in detail.

  • Go to http://www.epfindia.gov.in/
  • Click on Our Services->Employers
  • Click on Establishment Search
  • Find your organization by entering the Establishment code/ name of the office
  • Enter Captcha
  • Click on Search
  • Select your company
  • Click View Details on the company
  • You will see Validity Status and Establishment Status
  • If PF status is exempted as shown in Image below then your EPF money is with your company trust.
Employer Details as per EPFO Validity Status

Employer Details as per EPFO Validity Status

EPF Private Trust and UAN Number

Just like Employees who are members of unexempt EPF, Employees Registered With Company Managed Private Provident Fund Trust get UAN Number.  UAN is a 12 digit single account number which is linked to your provided fund money. It is like PAN number. Please activate your UAN to verify the EPF details.

UAN number can be used while transferring.  The process of transferring from/to EPF Private Trust also remains the same as from Unexempted organization. Now you don’t need to worry about different EPF accounts and then transfer them when you join a new job. Now each employer will just give you a member id, and all those member ids will be linked with the same UAN. Our article FAQ on UAN number and Change of Job talks of  What is Member Id and how does it differ from UAN number in detail.

Though UAN number is provided employees of EPF Private Trust cannot see there balance/passbook online from UAN official website. Such employees have to depend on their company for providing such details.

EPF Trust, Exempted Establishments, EPF Balance, Passbook

The Passbook which shows that company is depositing EPF and EPS amount is not available on EPF website for employees who work in companies with EPF Trust as shown in the image below. The company provides its own site or information about the contributions to EPF Trust.

No EPF passbook for exempted organization

No EPF passbook for exempted organization

EPF details of exempted trusts are only available with the employer.

Employees of such exempted establishments can check their EPF balance in the following ways:

  1. Check your PF slip or payslip: Most big establishments, provide salary slips to their employees via internal emails. Employees can check their payslips for EPF account balance. Some companies also give EPF slip in addition to the salary slip. Employees can find their monthly contributions as well as their EPF account balance in that slip.
  2. Check the company’s employee portal: Most large companies maintain a company website on which employees can log in and check their EPF account balance in the EPF section. Wipro and TCS are an example of such companies that provide the online facility to check one’s EPF account balance and get PF statement.
  3. Check with the company’s HR/Payrool department: Employees contact the company’s HR department as it deals with the employees’ PF and is better able to provide the related details.

EPF details of Wipro Exempted Trust

Wipro: employees can view their PF contribution by logging into an internal site called My Wipro -> MyFinancial->Reports->PF

EPF details of TCS Exempted Trust

TCS: In the Ultimatix portal go to my documents column. You can check your PF balance there.

If you leave TCS then you can access TCL Alumni portal, https://www.alumniportal.tcs.com/, You can also download your PF statement from TCS alumni portal. TCS Alumni Portal -> My Documents -> Download Provident Fund Statement

Transfer from/to EPF Private trust

When you change job, your UAN number remains the same but a new Member Id is generated for the new employer. The service details should be reflected in the UAN site.

The image below gives an overview of how to transfer from EPF Private trust(Exempted) to Un-exempted EPF(2a) or From Unexempted EPF to Exempted EPF Trust(1b) or from Exempted to Exempted(3b).  The online transfer for PF launched on October 2, 2013, is also available to Private Trusts from Oct 2014. Our article  How to Transfer EPF Online on changing jobs explains it in detail.

From Exempted to Unexempted (2a in image below) :

  • Apply Online at EPF website, submit the claim to old Employer(with trust).
  • You must collect/ensure that you get Annexure-K, Cheque in name of EPFO to the new employer.
  • After some days, Check EPF passbook of the new employer.
  • You should see the amount transferred in, to passbook with the new employer.
  • Now you can track the UAN passbook of new member id for further EPF contributions.

From Unexempted EPF to Exempted EPF Trust(1b in the image below):

  • Apply Transfer Online at EPF website,
  • submit the claim to new Employer(with trust).
  • The new employer should complete the formalities.
  • After some days, Check EPF passbook of old employer. You should see the amount transferred out, from passbook with the old employer.
  • To track further EPF contributions, you need to contact your new employer with Trust. As new employer is exempted trust your details will not be available at UAN website.

From Exempted EPF to Exempted EPF Trust(3b):

  • Apply Online at EPF website,
  • submit the claim to old Employer(with trust)
  • You must collect/ensure that you get Annexure-K, Cheque in the name of the new company to the new employer.
  • Submit the Annexure-K, Cheque to the new employer
  • The new employer should complete the formalities and transfer money from old employer.
  • To track further EPF contributions, you need to contact your new employer with Trust. As new employer is exempted trust your details will not be available at UAN website.
Transfer t/from EPF Private Trust to EPFO

Transfer to or from Exempted EPF Private Trust to Unexempted EPFO

Transfer of EPF on changing Job from EPF Exempted Trust to Unexempted EPF

    • Go to the EPFO members’ portal and log in using your UAN and password.
    • Verify that all your details are populated in the UAN portal. No missing or incorrect information.
    • Verify that your KYC is approved.
    • Click on Online Services->Transfer Request. 
    • The Employee has to get his claim attested by the previous employer (with Exempted Trust).
    • A PIN will be generated and sent to the registered mobile number.
    • Submit the claim form to the previous employer (with Exempted Trust).
    • The employer should approve the request.
    • Collect Statement, Annexure K, Letter and Cheque issued to Regional EPFO office
    • You can check the status of transfer through your member portal account. You would also get a regular update through SMS.

EPF Private Trusts are like Cooperative Banks

To show an analogy, EPF Trusts are like Cooperative Banks while EPFO is like RBI. A cooperative bank is an institution which is owned by its members. They are the culmination of efforts of people of same professional or other community which have common and shared interests, problems and aspirations. They cater to a services like loans, banking, deposits etc. like commercial banks but widely differ in their values and governance structures. They are usually democratic set-ups where the board of members are democratically elected with each member entitled to one vote each. In India, they are supervised and controlled by the official banking authorities and thus have to abide by the banking regulations prevalent in the country, RBI in India.

Now think of EPFO in place of RBI and EPF Private Trust in place of the cooperative bank.

Video on What are EPF Trust of EPF Exempted Establishment

This 9-minute video talks about, What is PF trust? 2. Is there any difference between members of EPFO and members of PF trust? 3. How to withdraw money from PF trust of a company? 4. How to transfer PF trust money to another company, EPFO? 5. How check PF Trust balance?

Video on How to transfer EPF Trust of EPF Exempted Establishment

This 8-minute video talks about how to transfer from EPF trust, what documents you need to collect. Remember you need to contact your old employer as your EPF contributions are with the EPF trust and not EPFO.

EPFO and EPF Trust

These trusts are regulated by the Employees’ Provident Fund Organisation (EPFO).

Retirement fund body EPFO has made it mandatory for private provident fund trusts to file their returns online every month from April 2014 to improve the monitoring of these employers. In the e-return, the trusts provide information about employment in their organisation, contribution towards social security schemes, investments of funds, audit, financial statement and financial health of the trust. The EPF website has information about the Exempted Establishments.

EPF Website provides information about Exempted Establishments as shown in the image below.

EPFO monitors Exempted EPF Trusts

EPF website and Exempted Establishments

Companies with private EPF trusts are evaluated periodically on six parameters (100 points for each), such as: full and timely monthly remittances of EPF accumulations to the private trust; transfer of funds — for example on exit of employees; efficacy of making investments, the rate of return and settlement of claims and audit of the private trust’s accounts. he EPFO website has already put up the ranking of 1,552 companies for Dec 2017, with many firms getting a perfect score of 600. The image shows the excerpt from PerformaEvaluationtion of Exempted establishments

EPFO evaluation of exempted establishments

EPFO evaluation of exempted establishments

Overview of EPF and Types of EPF Funds

Employee Provident Fund (EPF) is implemented by the Employees Provident Fund Organisation (EPFO) of India. An establishment with 20 or more workers working in any one of the 180+ industries ( given here) should register with EPFO. Typically 12% of the Basic, DA, and cash value of food allowances has to be contributed to the EPF account. EPFO is a statutory body of the Indian Government under Labour and Employment Ministry.  It is one of the largest social security organisations in the world in terms of members and volume of financial transactions undertaken.

As per the Employees’ Provident Fund & Miscellaneous Provisions Act 1952, those establishments that recruits 20 or more employees have to covered under the EPFO act and they have to deduct 12% contribution from Employees wages/salary(Basic+DA+retaining allowances if any) on monthly basis and it has to be remitted to EPF fund along with employer equal share.

What is the meaning of Statutory?

Statutory means controlled or determined by a law or rule.The difference is between statutory and legal. If something is legal, it is allowed by the law, whereas if it is statutory, it is regulated by law. It is easier to understand if one looks at the what is not legal or Statutory. If something is not legal, the law says you can’t do it. If something is not statutory, there are no laws regulating it. Example of Statutory warning is : Cigarette Smoking is Injurious to Health

What is the meaning of exempt?
Exempt means free from an obligation, duty, or liability to which others are subject.

Types of EPF Funds

For an employer, there are three ways he can contribute to Provident Fund of his Employees if the number of employees is more than 10.

  • One is to save in an un-exempt fund like the EPF under the EPFO. Un-exempted firms are those firms which maintain the PF accounts of their workers with EPFO. There are over five crore active subscribers whose accounts are being managed by EPFO.
  • Save in a company-run exempt fund, EPF Private Trust, recognised by the EPFO and which pays at least the same interest as the EPF.  EPF Trust has to do the duties and responsibilities like EPFO. EPF Private trusts are formed by firms that manage the money and accounts of their workers themselves and have an exemption from filing PF returns. The members of these trusts enjoy income tax and other benefits at par with EPFO subscribers. Such establishments who seek exemptions and create EPF Private Trusts are called exempted establishment. However, the pension is payable only by the EPFO.
  • Put money in a company-run excluded fund, which is not EPFO regulated, but is set up with approval from the resident income tax commissioner. This type of fund looks after all investments and fund management itself and is self-regulated.

How to start EPF Private Trust?

The organization has to make an application to the Government, through the jurisdictional Regional Provident Fund Commissioner, to exempt it from the operation of the statutory provident fund scheme. The permission to companies to run their own PF scheme is however subject to a number of conditions. One of the important conditions relates to guaranteeing a rate of return on PF accumulations at par with the statutory scheme. If the government is satisfied that the benefits provided to the employees under the private provident fund scheme are, on the whole, not less favourable than the benefits provided in the statutory scheme, then it may permit the entity to run its own scheme instead of the statutory scheme. The EPF exemption requirements can be read at EPF page

A private scheme can be formulated either for all the employees of the company or for a specified class of employees (e.g. managerial staff) .The organization is required to create a board of trustees for governance of the PF scheme and to ensure an arm’s length transactions between the entity and the trust. The entity is also liable to make good any loss caused to the trust by fraud, defalcation, wrong investment etc. The entity has to pay only an inspection charge of 0.18% of wages rather than the administrative charges of 1.10% of the wages. Therefore, there is a cost saving of 0.92% of the wages. Multiple units of an entity can also participate in a common provident fund trust.

Related Articles:

All About EPF,EPS,EDLIS, Employee Provident Fund

Have you worked in company with EPF Trust? Did you transfer from EPF Trust to Unexempted organization or from Unexempted Company to EPF Trust? How was your experience?

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