In the 208th Meeting of the Central Board (EPF) held in Hyderabad, Insurance Benefits for Dependants of EPF Members Raised from Rs 3,60,000 to Rs 6,00,000.
EPFO Moves to M-Governance– EPFO Services on Mobile Application.
Changes made to EPF scheme
- In a major decision, the Central Board of Trustees enhanced the Insurance benefits under the Employees Deposit Linked Insurance Scheme(EDLIS) 1976 admissible to dependants of EPF members from the present maximum of Rs 3,60,000 to Rs 6,00,000.
- This will benefit 4 Crore EPF contributing members.
- Last year the approximate amount paid to about 30,000 beneficiaries was to the tune of Rs. 180 crores.
- The Board also recommended removal of the condition of continuous employment of one year under current employer before being eligible for insurance benefits.
Government launched three new mobile based services for EPF members namely
- Mobile Application,
- SMS based UAN Activation
- Missed Call service
……on the eve of the 208th meeting of the Central Board of Trustees (EPF).
Through which employees can access their accounts for viewing their monthly credits through the passbook as well view their details available with EPFO.
Similarly the EPF pensioners have been given the facility to access their pension disbursement details through this mobile app. likewise the employer can also view their remittance details.
Employee’s Provident Fund (EPF) scheme
The Constitution of India under “Directive Principles of State Policy” provides that the State shall within the limits of its economic capacity make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old-age, sickness & disablement and undeserved want.
Hence Employees’ Provident Fund and Miscellaneous Provisions Act 1952 was enacted, which applies to the whole India except Jammu & Kashmir.
- A provident fund is created with a purpose of providing financial security and stability to employees.
- A person starts his contribution in the PF fund once he joins a company as an employee.
- The contributions are made on a regular basis.
- The primary purpose of PF fund is to help employees save a fraction of their salary every month so that he can use the same in an event that the employee is temporarily or no longer fit to work or at retirement.
- Employers and employees both contribute @12% of wages in contribution accounts.
- Further, the employers also contribute towards administration of the benefits under the EPF & MP Act.
The rate of contribution for certain category of establishments is 10%. These are:-
- Any establishment in which less than 20 employees are employed
- Any sick industrial company and which has been declared as such by the Board for Industrial and Financial Reconstruction
- Any establishment which has at the end of any financial year has accumulated losses equal to or exceeding its entire net worth
Why EPF scheme is beneficial for social security?
- Employee Provident Fund is a very important investment for the necessities of employee’s future.
- The tax free interest and the maturity award ensure a very good growth of money.
- If the PF money continued for a very long period of time, it can help in meeting employee’s requirements including his retirement goals.
- If an employee fall short of funds during emergencies and at those moments borrowing is the only option left. At this time the EPF can be very helpful because the kinds of benefits it provides no other investment can offer the similar remunerations.
The PF can be used for multiple purposes at different moments as it guarantees benefits such as:
- Accumulation plus interest upon retirement, resignation and death
- Partial withdrawals allowed for specific expenses such as house construction, higher education, marriage, illness etc.
- EPF is providing employees with life cover.
Some of the problems of EPF scheme
- Last year , Govt. has ordered companies to step up their contributions to the Employees’ Provident Fund Organisation (EPFO). A new directive raises the basic salary limit for PF enrollment to ₹15,000 from ₹6,500, bringing many new employees under the EPFO umbrella. The expanded coverage will lead to a spike in wage costs for companies.
- Companies in sectors such as building and construction, placement agencies, mines, banks, and healthcare are likely to see a large impact.
- In the present year’s budget government has provided choice to employees between NPS and EPF to contribute in. NPS has been found better in terms of returns so it will definitely provide a strong competition to EPF.