EPFO to enhance insurance benefits 30 times the monthly wage
Advertisement
Advertisement
Facing tough competition from the National After decades of wielding a monopoly over the retirement funds of workers in the organised sector, the EPFO is worried it could lose subscribers to the NPS, which has been offering better returns in the last few years—as much as 20% versus 8.75%, reported the Economic Times.
Central
Currently, EDLI subscribers with over a year of service get 20 times the average monthly wage of the preceding 12 months along with a 20% bonus. At a monthly wage of Rs 15,000, this takes the total benefit under the scheme to Rs 3.6 lakh.
If the proposal goes through, this will rise to Rs 5.5 lakh, including 30 times the average monthly wage and the average balance in the PF account in the preceding 12 months along with a 20% bonus.
Advertisement
At a monthly wage of Rs 15,000, this takes the total benefit under the scheme to Rs 3.6 lakh. If the proposal goes through, this will rise to Rs 5.5 lakh, including 30 times the average monthly wage and the average balance in the PF account in the preceding 12 months subject to a ceiling of Rs 1 lakh.
Jalan said the proposal is pending with the labour ministry, which will take a call after stakeholder consultation. EDLI, which is applicable to all factories and establishments covered by the Provident Fund Act, provides for a lump sum payment to the nominated beneficiary in the event of the subscriber's death due to natural causes, illness or accident.
It is entirely funded by the employer, which contributes 0.5% of monthly basic pay (capped at a maximum of Rs 15,000) as premium for life cover in case the organization does not have a group insurance scheme for its employees.
A total of Rs 697.7 crore was contributed under the scheme in FY14 and claims worth Rs 152.6 crore were settled. It is estimated that out of 4.5 crore EPFO subscribers, about 80 lakh opt for other private group insurance plans after seeking exemption from EDLI.
Improving the attractiveness of the PF and similar schemes under the law governing them has become a key challenge for the EPFO. Especially, as the government has decided to give formal sector workers a choice between EPFO and NPS.
Advertisement
(Image: Indiatimes)
Advertisement
- I got a $40K raise using this 30-second strategy. It made me realize loud work, not hard work, always wins.
- Qatar Airways' new CEO explains why it's sticking with the Airbus A380 as other airlines retire the costly superjumbo
- Prince Harry and Meghan found out about Kate Middleton's cancer diagnosis on TV like everyone else, report says
- Fresh photographs of Milky Way’s black hole Sgr A* reveal strong, twisted magnetic field similar to M87*
- 8 Lesser-known places to explore in Himachal Pradesh
- Markets end FY24 on buoyant note amid positive global cues
- SRM Contractors IPO allotment – How to check allotment, GMP, listing date and more
- Rupee falls 6 paise to settle at 83.39 against US dollar