Big news for PF account holders. Govt makes changes. The Provident Fund (PF) is super important for salaried workers. It acts as a retirement savings plan and also serves as an emergency fund while they’re working, helping to keep their finances stable when unexpected situations arise. The updated Employee Deposit Linked Insurance (EDLI) scheme from EPFO now includes EPF members who die within a year of starting their job, giving their families crucial financial support.
For those changing jobs, they can keep their insurance coverage even if there’s a break of up to two months between positions, which means they won’t lose financial protection. Previously, families of employees who passed away within a year of employment couldn’t access insurance benefits, but the new rule guarantees a payout of ₹50,000 to assist them in those tough times.
With the revamped EDLI scheme, families can now receive insurance benefits ranging from Rs 2.5 lakh to Rs 7 lakh, greatly enhancing their financial security during unexpected family crises. These updates are likely to benefit over 1,000 families each year who face the loss of a loved one while employed, providing better social security for those left behind.
Additionally, EPFO has reduced the penalty for late PF contributions to just 1% per month, easing the burden on companies while still ensuring employees get their benefits on time. For the fiscal year 2024-25, EPFO has set an annual interest rate of 8.25% on EPF savings, which means employees will see better returns on their savings.
If an EPF member passes away while employed, their nominee or legal heir will receive an insurance payout based on the average salary from the last 12 months, ranging from Rs 2.5 lakh to Rs 7 lakh. The best part? Employees don’t have to pay for this coverage—the employer contributes 0.5% of the basic monthly salary to the EDLI scheme.