EPFO may okay 3-year insurance after job cessation

Retirement fund body EPFO is likely to approve on Tuesday a proposal to provide insurance cover to its subscribers for three years after cessation of employment. The Central Board of Trustees (CBT), which is the main decision making body of Employees’ Provident Fund Organisation, is scheduled to meet on Tuesday  here.

According to the agenda of the meeting, a proposal to introduce voluntary retention of EDLI membership to subscribers at reduced rate of contribution for three years after cessation of employment would be discussed. The CBT will consider a proposal for an amendment to Employee s Deposit Linked Insurance (EDLI) Scheme that presently provides up to Rs 3.6 lakh insurance coverage. The employers are required to pay 0.5 per cent of basic wages of workers as premium for the insurance scheme for their workers. The workers used to lose membership or benefit of scheme after quiting job.

The CBT will also consider a proposal to provide interest to inoperative account holders of the EPFO subscribers. The inoperative accounts are those accounts wherein the contribution has not been received for 36 months. EPFO had stopped payment of interest to such accounts from April 1, 2011. The move was aimed at discouraging parking of funds with EPFO in these dormant accounts. However, considering suggestions from the people to review the EPFO decision on inoperative accounts, the board will consider tomorrow the proposal for crediting of interest to Inoperative accounts of EPFO subscribers.

The CBT headed by the Labour Minister will also consider a proposal for increasing the number of days from existing 15 to 30 days for borrowing of Funds from CBLO (collateralized borrowing and lending obligation) for participating in Primary auctions of Government Securities and Corporate bonds. 

The board may also consider a proposal to amend the investment pattern for EPFO to increase investment in government securities from existing 50 per cent to 65 per cent. It would facilitate around Rs 11,000 crore more flowing in government bond market every year.