In a notification issued on June 18, the government in the newly modifed Employees' Deposit Linked Insurance (Amendment) Scheme, 2010, said the benefits will be for employees of both the public and private sector.The government said if an employee who is a member of the Employees Provident Fund Organisation or a provident fund exempted under Section 17 of the Act dies, the persons entitled to receive the PF amount will get an additional amount equal to the average balance in the employee's PF account in the last 12 months, if it is less than Rs 50,000.
However, if the amount exceeds Rs 50,000, the relative will be paid 40 per cent of the excess amount, not exceeding Rs 1,00,000. For example, if the balance was Rs 1,00,000, the amount paid will be Rs 50,000 (Rs 1,00,000 minus Rs 50,000) plus 40 per cent of Rs 50,000 (Rs 20,000). The total in this case would be Rs 70,000 over and above the account balance.
The insurance amount, however, would fall if the average balance is higher. For example, if the amount is Rs 2,00,000 the relative would get Rs 50,000 plus 40 per cent of Rs 1,50,000 (Rs 2,00,000 minus Rs 50,000). The total in this case would be Rs 1,10,000. But the relative of the deceased will get Rs 1,00,000.
Earlier, an EPFO subscriber or member of a provident fund approved under Section 17 would get an insurance cover up to Rs 60,000, in case he/she died.
Said Rajesh Srinivasan, senior director, Deloitte, "At present, there is a scheme for members of EPFO or a provident fund approved under section 17 in which the employer and government contribute 0.5 per cent. The government allows companies to follow either these guidelines or have their own scheme. But the latter has to be better than the existing scheme."
