The Employees’ Provident Fund Organisation has observed various cases in which beneficiaries get relatively little money in the settlement of Employees Deposit Linked Insurance Scheme (EDLI) claims of deceased members. “It is mandated that specifically in EDLI cases where the amount payable to the beneficiary of a deceased member is less than the Rs 2.5 lakh minimum assurance benefit, it be ensured from MIS that the service rendered by the members under different MIDs, if any, have been transferred and taken into account for the computation of the payable benefit,” stated an EPFO circular issued on November 25, 2023.
Multiple EPF accounts linked
Many deceased members had several PF ids (A/cs) connected to their individual UANs. According to the EPFO notification dated November 25, 2023, “While analyzing the data on settlement of death claims it has been observed that in several cases the deceased members had multiple PF ids (A/cs) linked to their respective UAN. This makes verification of previous membership of the deceased member from the MIS a prerequisite before settling the death claims, as this facility is not available in F.0 interface or the application software. If this manual verification from MIS is not done, then benefits to the intended beneficiaries are adversely impacted.”In this regard, your kind attention is invited to the page number 179 of Manual of Accounting Procedure Part-II-A and II-B dealing with the procedure of transfer of account after the death of the member — prescribes as follows:“11.9 Where a Provident Fund account has not been transferred during the life time of the member on account of non-submission of transfer application or for any other reason, and if it is brought to the notice of Regional Provident Fund Commissioner about the earlier Provident Fund membership, the Regional Provident Fund Commissioner may arrange to get the account transferred from other Regional Office/Sub-Regional Offices without insisting for a transfer application and settle the deceased member’s account.”
According to the revised EDLI Scheme, continuously 12-month services provided with two distinct enterprises will also be taken into account when determining EDLI rewards. This will only be feasible, though, if the dead worker’s prior membership is moved to the current PF account.
As per the notification, “Due to this amendment in EDLI Scheme, it has become even more crucial to ensure verification, flagging and merging of previous membership under a (JAN to the present PF account so that the deceased worker’s family are not deprived of the eligible EDLI benefits stipulated as per the EDLI amendment.”
What is EDLI
The EPFO offers the EDLI scheme to private sector salaried employees. This system works in tandem with the EPF and the Employees’ Pension Scheme (EPS). The benefit amount is determined by the employee’s last drawn salary.
5 key features of the EDLI scheme
- A maximum assured benefit of Rs 7 lakh would be paid to the nominee or legal successor of an EPF member who dies while in service.
- The minimum guarantee benefit under the EDLI scheme 1976 is Rs 2.5 lakh if the dead member remained in continuous employment for 12 months prior to his or her death.
- This life insurance benefit provided to EPFO members is provided at no cost to PF/EPF account holders. • Employer contribution is limited to 0.5% of monthly salaries up to Rs 15,000; employee contribution is non-existent.
- PF members are automatically enrolled in the EDLI scheme.
- Benefit is credited straight to the legal heir’s or nominee’s bank account.