What is an PF exempted company?
Is it benefit in a PF company for employees?
An exempted company is the company which has not registered under the EPF Act and has given other similar facility to the employees. In other words, an exempted company is the type of company where the employees do not have an EPF account.
Under Section 17 of the EPFO Act, if an organization maintains its own account of PF for its employees, then that company is an exempted company. Yet, there are certain rules which the EPFO has stated for a company that wishes to be an exempted company.
- A company that is less than 3 years old, like a start-up company, cannot opt for being an exempted company.
- An organization or industry which is registered under the Societies Act cannot be an exempted company.
- Those companies under the control of the central government or the state government are not eligible to be an exempted company.
- The companies which are under the State or Central Government cannot be exempted.
Benefits of a Exempted PF Trust
- More efficiency. Members of exempted PF trusts pay only 0.18% rather than 1.1% as administration charge.
- Higher returns: Private PF trusts are allowed to declare a higher interest rate than the EPF.
- Better service: EPFO service is considered slow and poor in terms of customer satisfaction. The private PF trust can provide a better level of service