Page 153 - Group Insurance and Retirement Benefit IC 83 E- Book

In 1976, when the scheme was introduced the benefits were as follows:

1. In case of death of an employee while in service, in addition to the accumulated
amount of Provident Fund to his credit an additional amount equal to the balance at the

time of death subject to a maximum of Rs. 10000 will be paid to his family.
2. For this benefit, all the employers covered under the PF Act, shall contribute 50 paise

for every hundred Rupees Salary towards the insurance and one paisa for every Rs.100

salary towards administrative expenses.

The scheme also provides an exemption clause Section 17(2A), as per which if the

employer provides better benefits than that of the EDLI Scheme, then he can discontinue
payment of the above contribution of 51 paise per every Rs. 100 salary to the PF

authorities, but after getting exemption from the Central Provident Fund Commissioner
(CPFC), New Delhi.

Life Insurance Corporation of India came out with an alternative and better scheme in

1976 and offered a Group Insurance Scheme in lieu of EDLI. The sum assured was

10500 flat and the premium was based on the ages of the employees. Generally it was
found that the premiums payable to the insurer were much less than the contribution

payable to the PF, and hence many companies switched over to the LIC Scheme after
getting exemption from the CPFC, New Delhi.

The benefits under the scheme were changed periodically in 1990, 1994 and 2000 and

2010 as follows:

In 1990, the death benefit was made equal to the PF balance upto 15000, and in case the

PF balance is above 15000, the death benefit was equal to 15000 + one fourth of the

amount in excess of 15000, subject to a maximum of 25000. So LIC modified its scheme
and offered a graded benefit of 11000 to 27000. It also assured that in case of death of a