The Employees’ Provident Fund Organisation’s Central Board of Trustees (CBT) has decided to retain interest rate of 8.25 per cent for provident fund deposits for FY 2024-25 but has enhanced social security benefits under its insurance scheme.
The CBT recommended 8.25 per cent annual rate of interest will be credited to members’ accounts for the FY25 after the Ministry of Finance notifies it.
The CBT, under the chairmanship of Union Labour and Employment Minister Mansukh Mandaviya, also approved enhancement of insurance benefits under the Employees’ Deposit Linked Insurance (EDLI) scheme.
A minimum life insurance benefit of ₹50,000 will be provided in cases where an EPF member dies without completing one year of continuous service, the Ministry of Labour and Employment said in a statement after the CBT meeting got over on Friday.
Higher benefits
This amendment is expected to result in higher benefits for more than 5,000 cases of deaths in service, every year, the Ministry informed.
The Board has relaxed certain conditions to allow members, who die in service after a non-contributory period, avail benefit.
Previously, said the Ministry, the EDLI benefits were denied in such cases treating these death away from service.
“Now, if a member passes away within six months of their last contribution received, the EDLI benefit will be admissible, provided the member’s name is not stuck off from rolls. The modification is estimated to result in benefits for more than 14,000 cases of such death cases every year,” the Ministry’s statement read.
Another aspect of the revised scheme is that, earlier, a gap of even one or two days (such as weekends or holidays) between employment in two establishments would lead to denial of minimum EDLI benefits of s ₹2.5 lakh and maximum of ₹7 lakh, as the condition of the continuous service of one year was not met, the Ministry stated.
Under the new modifications, a gap of up to two months between two spells of employment will now be considered as continuous service, ensuring eligibility for higher quantum EDLI benefits — a change that is expected to benefit more than 1,000 cases of deaths in service, every year, said the Ministry.
The modifications are estimated to result in higher benefits under EDLI in more than 20,000 cases of death in service every year.
These improvements aim to enhance the social security benefits for families of EPF members, ensuring better financial protection and reducing hardships faced by families in distress, it observed.
On implementation of Supreme Court judgment of November 4, 2022, regarding to Pension on Higher Wages (PoHW), the CBT was apprised that the EPFO is working on a mission mode and 72 per cent of the applications have been processed.
The EPFO has successfully implemented the Centralised Pension Payment System (CPPS) across all Regional Offices (ROs) from January 2025 for quicker disbursal of pension through a Centralised Pension Disbursement Account (CPDA) maintained at the New Delhi branch of State Bank of India.
During the month of January, 2025, pension to 69.35 lakh pensioners amounting to ₹1,710 crore was disbursed through CPPS.
One of the major reasons for litigation has been the cases of imposition of damages for belated remittances of PF dues. The rate of imposition of damages had been rationalised to 1 per cent per month of delay vide a gazette notification of June 14, 2024.
