The Employees’ Provident Fund Organisation (EPFO) on Wednesday increased the maximum assurance benefit to up to Rs. 7 lakh from the existing cover of Rs. 6 lakh under the Employees’ Deposit Linked Insurance (EDLI) scheme.
Employees’ Deposit Linked Insurance, EDLI is an insurance cover provided by the Employees’ Provident Fund Organization (EPFO). A nominee or legal heir of an active member of EPFO gets a lump sum payment in case of the demise of the member during the service period.
In the 227th Meeting of the Central Board of Trustees (CBT), the board accorded approval for amendment of paragraph 22(3) of Employees’ Deposit Linked Insurance Scheme, 1976 to enhance the maximum assurance benefit to Rs 7 lakhs from the present maximum assurance benefit of Rs 6 lakhs.
“All organizations covered under Employees’ Provident Fund (EPF) and Miscellaneous Provisions Act, 1952 get enrolled for EDLI automatically.”
This scheme works in combination with EPF and EPS. There is no exclusion under this scheme and the insurance cover depends on the salary drawn in the last 12 months of the employment before death.
Both employee, as well as the employer, contribute to all three schemes run by the EPFO. The contribution made by the employer to EDLI is 0.5% (subject to a maximum of Rs 75).
The recent amendment will provide additional succour to families and dependents of members of the Scheme in case of their unfortunate death while in service. CBT was also informed that the actuarial valuation of EDLI Fund has allowed for the continuation of minimum assurance benefit of Rs 2.5 lakhs beyond February 14, 2020, and extension of minimum assurance benefit of Rs 2.5 lakhs to the family of those deceased members who were employed in multiple establishments during the 12 months preceding the month in which they died, as approved by CBT EPF in its 226th meeting.
In view of exceptional circumstances arising out of Covid-19, the agenda regarding interest rate was reviewed by the Central Board and it recommended the same rate at 8.50% to the Central Govt.
It would comprise of 8.15% from debt income and balance 0.35% (capital gain) from the sale of ETFs subject to their redemption by 31st December 2020.
It further recommended accounting such capital gains in the income of the financial year 2019-20 as being an exceptional case. The Central Board was apprised of the various initiatives taken by EPFO for extending nirbadh seamless service to stakeholders during the Covid-19 pandemic.
Members of the Board appreciated these initiatives and gave suggestions to further improve service delivery to all stakeholders.