EPFO Members To Gain As Insurance Benefits Extended Retrospectively From April 28

The move, which is effective retrospectively from April 28, 2024, will provide life insurance coverage of up to Rs 7 lakh to more than 6 crore EPFO members

Union Labour Minister Mansukh Mandaviya has announced the extension of enhanced insurance benefits under the Employees' Deposit Linked Insurance (EDLI) scheme for members of the Employees' Provident Fund Organisation (EPFO). The move, which is effective retrospectively from April 28, 2024, will provide life insurance coverage of up to Rs 7 lakh to more than 6 crore EPFO members.

The EDLI scheme, originally launched in 1976, is designed to offer financial assistance to the families of EPFO members in the event of the member's death. Since 2018, the scheme has provided a minimum insurance cover of Rs 1.5 lakh.

Before April 2021, the maximum benefit under the scheme was capped at Rs 6 lakh. However, the government revised the benefits through a notification on April 28, 2021, increasing both the minimum and maximum coverage to Rs 2.5 lakh and Rs 7 lakh, respectively. These enhanced benefits were initially introduced for a three-year period, ending on April 27, 2024.

Additionally, the requirement of continuous service of 12 months in one establishment was relaxed to cover employees who had changed jobs during the period. This extension will ensure continued insurance protection for EPFO members under the revised conditions.

Meanwhile, the EPFO has introduced new guidelines for managing reserves and surplus funds in exempted establishments, aiming to promote fairness and transparency in the handling of retirement savings.

In a recent directive to all regional provident fund offices, the EPFO provided instructions on how these reserves should be used to credit interest to beneficiaries, addressing concerns about equitable distribution. This decision follows requests from some exempted establishments seeking approval to allocate surplus funds at interest rates higher than those mandated by the EPFO.

These requests often arise during the surrender of exemption from EPFO regulations. Upon review, the EPFO found such practices problematic, indicating that inflated reserves suggest past earnings were not equitably distributed. The EPFO clarified that higher earnings should be reflected in the interest credited to all beneficiaries.