Page 155 - Group Insurance and Retirement Benefit IC 83 E- Book

assured sum of money, which is, much more than the amount the employees would have

got under the PF Scheme. With all these developments a large number of PF EDLI
Schemes are shifted from PF to the Insurance Companies.

Now let us see what is the procedure for shifting from PF Scheme to an insured scheme.

1. First the company will have to put up a notice in their notice board, informing the

employees of their decision to shift from PF Scheme to insured scheme and inviting

objections if any from the employee. Normally there will not be any objection as the
benefits are more for the employees.

2. Then the employer will have to make an application to the CPFC requesting for

exemption from the PF EDLI scheme and approval for the switchover.
3. The insurer from whom the employer desires to get the scheme should have an

alternative scheme, which is already approved by the CPFC.
4. Normally the approval is automatic and the insurer can commence the scheme from the

first of the month in which the application to CPFC is made.

Then the employer can stop payment of the EDLI contribution to the PF authorities and

start paying the premium to the insurer. However in spite of paying the premium, the
employer has to pay half a paise per every Rs.100 salary to the PF authorities as

inspection charges.

Thus it is a compulsory and statutory scheme and all the employers covered under the PF
Act will have to contribute either to the PF EDLI Scheme or to an alternative insurance

scheme. Now suppose an employer switches over to the insured scheme and then stops

payment of the premium to the insurer. Then the employees will be deprived of their
benefits. The PF authorities have the authority to inspect the company and see that the

premiums are regularly paid to the insurer, so that the employees will not be deprived of

their benefit. Also the insurer can inform the PF authorities about the non payment of
premium so that they can initiate action against the employer. In case the employer is

found to be at fault then he will be liable for imprisonment and\or monetary penalties.