PF rate lowered to 8.65%, loyalty benefits added and bonus on retirement
EPF interest rate for FY17 to be lower than that provided for FY16
The provident Fund rate
for 2016-17 has been reduced to 8.65 per cent from 8.8 per cent in 2015-2016.
Secondly, loyalty-cum-life benefit would be provided to all subscribers who
have contributed to the scheme for 20 years or more on retirement.
Here
are the important announcements regarding EPF
1)
Interest on EPF for FY17
cut: Employees' Provident Fund Organisation
(EPFO) subscribers, will get 8.65 per cent interest on provident fund deposits
for 2016-17, as decided by the organisation's trustees in December, Labour
Minister Bandaru Dattatreya said on Thursday. The decision, however, is yet to
be approved by the government.
The
Finance Ministry had last year also decided to lower the EPF interest rate of
8.8 per cent for 2015-16 decided by the EPFO's Central Board of Trustees (CBT),
to 8.7 per cent. The decision had drawn flak from all corners forcing the
government to uphold 8.8 per cent.
2) Loyalty-cum-life benefit suggested: The other important announcement was that EPFO's subscribers would get loyalty-cum-life
benefit of up to Rs 50,000 at the time of retirement for contributing to the scheme
for 20 years or more.
According
to the CBT, the suggested benefits will be provided on a pilot basis for two
years under Employees' Deposit Linked Insurance (EDLI) scheme, after which it
will be reviewed. The benefit would also be provided in case of permanent
disability even if the member has contributed for less than 20 years.
Those
members whose average basic wages are up to Rs 5,000 will get loyalty-cum-life
benefit of Rs 30,000. Similarly, the members with wages of Rs 5,001-10,000 will
be eligible for Rs 40,000 benefit. All those members getting more than Rs
10,000 monthly wage will be eligible for Rs 50,000 loyalty-cum-life benefit under
the proposed scheme.
3)
Minimum assured sum in event of death suggested: The CBT has also recommended a minimum sum assured of Rs 2.5 lakh in
the event of death of a subscriber.
"The
CBT has recommended amending the Employees' Deposit Linked Insurance Scheme
(EDLI) to provide for the minimum benefit of Rs 2.5 lakh and loyalty-cum-life
benefit of up to Rs 50,000 at a meeting held yesterday," a senior official
said. This benefit too will be provided on a pilot basis for two years, after
which it will be reviewed.
At
present, the dependants of the deceased get a sum assured of up to Rs 6 lakh.
There is no provision of minimum insurance and any benefit for surviving
members or in cases of permanent disability under the scheme.
Source | Business Standard | 14 April
2017
Regards
Pralhad
Jadhav
Senior
Manager @ Knowledge Repository
Khaitan & Co
Upcoming Event | MANLIBNET 17th Annual
International Conference on 15-16 September 2017 at Jaipuria, Noida, India
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