Employees’ Provident Fund (EPF): Interest Rate, Recommendation on Loyalty Bonus and Insurance Benefit Under ELDI
The EPFO has clarified that Subscribers to EPF Fund will receive an interest of 8.65% on the contribution for the Financial Year 2016-17. The clarification comes after reports suggested that Finance Ministry was looking to reduce the rate to 8.20% for the financial year as the rates for small savings scheme were slashed by 0.10% earlier in the month.
The Central Board of Trustees (CBT), apex decision making body of EPFO has also recommended following reforms for the benefit of the subscribers to the fund.
The recommendations require the approval of the Government to be implemented. Initially, the benefits will be applicable for 2 years and will be reviewed on expiry of the period.
Loyalty cum Life Benefit to the Subscribers: Recommended
Subscribers will be eligible for Loyalty Bonus on retirement at the age of 58 or 60 years as the case may be, provided they have contributed to the fund for 20 years or more. The members will be eligible for benefit up to Rs 50,000 at the time of retirement. The benefit will be provided under the Employees Deposit Linked Insurance (ELDI) scheme.
The Loyalty Benefit will also be extended to subscribers suffering from permanent disability, even if the contribution period is less than 20 years.
Members with average monthly basic wage up to Rs 5,000 will be eligible for loyalty cum life benefit of Rs 30,000/- only.
Members with average monthly basic wage up between Rs 5,001 to Rs 10,000/- will be eligible for loyalty cum life benefit of Rs 40,000/- only.
Members with average monthly basic wage of Rs 10,001 and above will be eligible for loyalty cum life benefit of Rs 50,000/- only.
Minimum Sum Assured Under ELDI: Recommended
Recommendation has also been made to provide minimum assured of Rs 2.50 lacs in case of death of the subscriber. Currently, there is no provision for minimum insurance or for persons with disability under the scheme.
The maximum sum assured under ELDI to the nominee of the deceased subscriber is Rs 6 lacs.
The recommendations made by CBT require the approval of the Government before it is implemented.