Retirement body Employees' Provident Fund Organisation (EPFO) has reduced the rate of interest to 8.65 per cent in 2016-17 from 8.8 per cent in 2015-2016.
The decision was taken by the EPFO's Central Board of Trustees (CBT). It, however, is yet to be approved by the Finance Ministry. As per the practice, the board's decision is concurred by the Finance Ministry after evaluating whether the EPFO would be able to provide the rate approved by trustees through its own income or not.
Once the Finance Ministry ratifies the rate of interest approved by the CBT, it is credited into the account of EPFO members for that particular financial year.
Earlier on Thursday, it was reported the EPFO has decided to give additional benefit of Rs 50,000 to its members. The benefit will be provided under a loyalty-cum-life programme that will be given at the time of retirement for contributing to the scheme for 20 years or more.
Here's all you need to know about loyalty-cum-life programme
- Loyalty-cum-life benefit will be provided to all those members on retirement at 58 or 60 years who have contributed to the scheme for 20 years or more.
- However, the 20-year clause will not be a constraint in the condition of permanent disability of the members. According to the proposal, the benefit will also be provided in case of permanent disability. In such cases, the members who have contributed to the Employees' Deposit Linked Insurance (EDLI) scheme for less than 20 years will be eligible.
- The Central Board of Trustees, EPFO's apex decision making body, has made a recommendation to the government for a minimum sum assured of Rs 2.5 lakh in the event of death of a subscriber. It has also recommended amending the EDLI scheme to provide the benefits and loyalty-cum-life benefit of up to Rs 50,000.
- The board's recommendation came in view of a huge Employees' Deposit Linked Insurance corpus of Rs 18,119 crore following addition of interest that accrued on investment of this fund.
- The suggested benefits will be available to members after government approval. Initially, it will be provided for two years on a pilot basis and will be reviewed thereafter.
- 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.
- 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.
(With inputs from PTI)