EMPLOYEES’ PROVIDENT FUND ORGANISATION 1

The Indian Economic Scenario  Due to global demographic pressures coupled with globalization and free market economy, India has witnessed exponential growth in labour mobility.  Their most productive phase is spent globe-trotting, necessitating mandatory contributions to social security systems of the host country, often forfeited when they move on before completing eligibility for benefits.  To address the social security concerns of such employees, Government of India has negotiated bilateral Social Security Agreements (SSAs) with some countries. 2

Being a reciprocal arrangement, SSA  ensures equality of treatment at par with the foreign workers  eliminates double coverage  facilitates counting of contributory periods of service in foreign country  facilitates export of benefits 3

Three main benefits under SSA  Detachment  Exportability of Pension  Totalisation of Benefits 4

 Employees sent on posting/ secondment to another country exempted from social security contributions in that country  Should be complying under the social security system of the home country  Period of detachment as stipulated in the Agreement. 5

 Benefits payable directly without any reduction to the beneficiary choosing to reside in the home country.  Benefits also payable directly to the beneficiary choosing to reside in a third country. 6

 Period of contributory service rendered in another country counted for determining eligibility for pension, only for a person not otherwise eligible  Calculation of benefit restricted to contributory period of service under the respective social security programme, on pro-rata basis. 7

Employees’ Provident Fund Organisation: EPFO Largest provider of Social Security in India. A statutory body under the aegis of the Ministry of Labour & Employment, Government of India. Implements provisions of the three social security schemes framed under the Employees’ Provident Funds and Miscellaneous Provisions (EPF & MP) Act,

Schemes administered under the EPF & MP Act, Employees’ Provident Funds Scheme, Employees’ Pension Scheme, Employees’ Deposit Linked Insurance Scheme,

As Competent Agency Issue of Certificates of Coverage to:  employees of establishments covered under the EPF & MP Act, 1952;  employees of other social security providers like Seamen’s Provident Fund, Banks and Educational Institutions. 10

As Liaison Agency EPFO is the Liaison Agency for other social security providers of the country sending their employees on posting abroad. 11

Eight Operative SSAs Belgium 1 st Sept.2009 Germany 1 st Oct.2009 Switzerland 29 th Jan Denmark 1 st May 2011 Luxembourg 1 st June 2011 France 1 st July 2011 South Korea 1 st Nov Netherlands 1 st Dec

Benefits under SSAs Detachment Totalisation Portability Belgium 5 years √ √ Germany 4 years Switzerland 6 years √ Denmark 5 years √ √ Luxembourg 5 years √ √ France 5 years √ √ South Korea 5 years √ √ Netherlands 5 years √

SSAs Signed (not yet notified) Hungary Norway Czech Republic Germany (Comprehensive SSA) 14

SSAs: Draft Finalised CanadaQuebecAustria Sweden FinlandPortugal 15

Australia Japan 16

Enabling provisions for IWs have been introduced in Para 83 of the Employees’ Provident Funds Scheme, 1952 and Para 43-A of Employees’ Pension Scheme, 1995 effective October 1, Further amendments to these Special Provisions have been notified effective September 11,

 Definition of International Worker  Applicability  Contributions on full pay (no ceiling)  Benefits available to International Worker 18

 An Indian employee having worked or going to work in a country having SSA with India and being eligible for the social security benefits of that country  An employee holding other than Indian passport, working for a covered establishment in India 19

Every IW employed in a covered establishment with effect from , other than an excluded employee, shall be required to become a member. 20

 There is no pay ceiling for an IW, hence contribution is made on Full Pay by both employer and employee  Contributions on total pay, regardless of where it is paid (India or abroad or split payroll) 21

Monthly Pay for Calculating Contributions The pay as defined under Para 29 of the EPF Scheme, 1952, includes: Basic wages Dearness allowance Retaining allowance Cash value of any food concession 22

 Final withdrawal : i) To member - on retirement & attaining the age of 58 yrs. - on retirement on permanent disability due to bodily or mental infirmity (includes TB, leprosy and cancer) - on the grounds as specified in the SSA ii) To survivor(s), on death of the member  Partial withdrawals/advances : for housing, marriage, hospitalisation, education, etc. 23

 Pension Payment for life on Retirement/ Superannuation.  Pension Payment for life on disablement during employment.  Withdrawal benefit (for service less than 10 years after totalisation) only for members covered under SSA  Exportability and totalisation of benefits as per the SSA. 24 IW : Entitlement under EPS

 PF final withdrawal not before 58 years of age, unless provided in SSA  Payable only in an Indian bank account, or as per the terms of SSA  Pension contribution on full pay  Withdrawal benefit under EPS 1995 only to those covered under SSA 25