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CMA Intermediate · Business Laws and Ethics · Employees Provident Fund and Miscellaneous Provisions Act, 1952

Under section 6C(4)(a) of the EPF Act, 1952, an employer may be required to pay further sums into the Insurance Fund. For what purpose, and up to what limit?

The further employer payment under section 6C(4)(a) covers expenses of administering the Insurance Scheme, excluding the cost of benefits, and cannot exceed one-fourth of the contribution the employer makes under section 6C(2). The Central Government determines the actual amount from time to time.

  1. ATo fund extra insurance benefits, up to twice the contribution under section 6C(2)
  2. BTo meet administration expenses of the scheme other than the cost of benefits, up to one-fourth of the contribution under section 6C(2)Correct
  3. CTo meet the cost of benefits payable to nominees, up to the full contribution under section 6C(2)
  4. DTo meet penalties for delay, up to one per cent of basic wages

Explanation

Section 6C(4)(a) allows further sums not exceeding one-fourth of the contribution under 6C(2), as the Central Government determines, to meet all expenses of administering the scheme other than the cost of benefits provided under it. Hence the options about benefit costs or double contribution are wrong.

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