EPFO Likely to Raise Insurance Cover: 10 Developments
Employees Provident Fund Organisation is likely to increase the maximum insurance cover for subscribers under the Employees' Deposit Linked Insurance Scheme. A committee is likely to take up the proposal for discussion on September 9. After the committee's nod, it will then be placed before the EPFO's apex decision making body the Central Board of Trustees' (CBT) headed by the Labour Minister. If implemented, the maximum insurance coverage could go up from Rs 3.6 lakh to Rs 5.5 lakh.
Here Are Top 10 Developments
1) Employees Deposit Linked Insurance scheme provides a lumpsum payment to the nominee in the event of the subscriber's death.
2) The proposal to raise the insurance benefit will benefit over six crore subscribers of the Employees' Provident Fund Organisation (EPFO).
3) Under the insurance scheme, 0.5 per cent of the basic wages of employees is contributed as insurance premium every month.
4) At present, in case of demise of a subscriber after one year continuous service, the nominee gets 20 times of average wage drawn during the past 12 months with 20 per cent bonus on it.
5) With the wage ceiling of Rs 15,000 per month, the maximum amount assured works out to be Rs 3.6 lakh.
6) It is now proposed that the maximum benefit should be raised to 30 times of the average pay drawn during preceding 12 months in addition to 50 per cent of the average balance of the employee provident fund account, subject to a ceiling of Rs 1 lakh. Once approved, the maximum sum assured will increase to Rs 5.5 lakh.
7) The PF body also seeks to simplify the insurance norms for subscribers with less than 12 months of service. Under the existing scheme, the subscribers with less than 12 months of service are entitled to a maximum sum of Rs 1.2 lakh.
8) In another development, Labour Minister Bandaru Dattatreya had earlier said that the PF body is further simplifying its forms to ensure hassle free services its subscribers. It is proposed that attestation of employer will no longer be required in cases where the employees have got their KYC information including Aadhar seeded and have activated their UAN (Universal Account Number).
9) The PF body is also likely to discuss this month the rate of interest on deposits for the current fiscal.
10) The EPFO had paid 8.75 per cent rate of interest for 2013-14 and 2014-15 financial years to its subscribers.
