Retirement fund body EPFO has asked its over 120 field offices for not insisting the employers to pay at least 0.5 per cent of wages as premium for insurance policies subscribed by them in lieu of Employees Deposit Linked Insurance Scheme (EDLI).
This directive will facilitate employers to buy group insurance schemes for their workers from insurance companies at a price lower than 0.5 per cent of wages as required under EDLI.
"... Many offices while examining or processing EDLI exemption proposals are insisting upon the criteria of minimum premium of 0.5 per cent (of) wages to be paid by the employer in the schemes offered by insurance companies in lieu of EDLI," an official order said.
According to it, the provisions for exemption from EDLI scheme under the Employees' Provident Fund Miscellaneous Provisions Act and EDLI Scheme, 1976 do not sustain or support the criteria for insisting premiums payable by employers in EDLI exemption cases should not be less than the statutory contribution of 0.5 per cent of wages.
"Field offices may not insist upon the criterion while processing EDLI exemption matters and if any instructions or directives have been issued... The same may be recalled," the order added.
At present, employers can seek exemption from contributing towards EDLI by offering better deal to their workers by subscribing to such insurance products available in the market.
These group insurance policies are required to provide benefits at par or better than EDLI and are approved by the Employees' Provident Fund Organisation (EPFO).
Under EDLI, the employers are required to contribute 0.5 per cent of basic wages as premium for insurance product managed by the EPFO.
However, the insurance companies in the market may offer such or even better product at relatively lesser insurance premium.
EDLI is one of the social security schemes run by EPFO which provides maximum sum assured of Rs 3.6 lakh on the demise of a subscribers to the nominee.
