EPFO on board Air India, employees will get pension and insurance cover

0

EPFO has integrated Air India and its employees will now benefit from pension and insurance coverage

New Delhi:

The Employees Provident Fund Organization (EPFO) has engaged Air India Limited to provide social security benefits such as Provident Fund (PF), Pension and Insurance to its employees. It collected contributions from approximately 7,453 employees for December 2021.

The step was part of the overall privatization of the national carrier, as its employees now fall under the Employees Provident Fund and Miscellaneous Provisions Act 1952, with effect from 1 December 2021.

According to the notification to the official gazette, the employer and the majority of the employees have agreed to switch to the provisions of the EPFO.

Prior to this change, Air India employees contributed to the provident fund and the money was channeled to two funds AIEPF (Air India Employees Provident Fund) and IAEPF (Indian Airlines Employees Provident Fund) with a total investment of around Rs 4 500 crore. Both of these funds were recognized under the Provident Funds Act 1925.

With this notification to the Official Gazette, the airline has completed the process of transferring employees from the old PF to the new system.

Under the PF Act of 1925, provident fund benefit was available but there was no statutory pension or insurance scheme. The employees participated in a self-contributing pension plan based on an annuity.

A guaranteed minimum pension of Rs 1,000 per month will be available for employees and pensions for family and dependents in the event of death of the employee.

An assured insurance benefit in the event of death of a member will be available in the range of Rs 2.50 lakh minimum and maximum 7 lakh.

No premium is charged to EPFO-covered employees for this benefit.

The Tata Group took over the debt-ridden airline from the government. Air India had applied for EPFO ​​cover, which was approved, the pension fund body said.

“EPFO on board Air India for social security cover to meet the social security needs of their employees. Air India Ltd has applied voluntarily covered u/s 1(4) of the EPF & MP Act, 1952 which has been authorized … with effect from December 1, 2021,” the Ministry of Labor said in a statement released on Saturday.

These Air India employees will now be entitled to benefits such that they will receive an additional 2% employer contributions into their Provident Fund (PF) accounts at 12% of their salary.

Previously, they were covered by the PF Act of 1925, where contributions to the PF were 10% by the employer and 10% by the employee.

The EPF 1952, EPS 1995 (employee pension scheme) and EDLI 1976 (group insurance) schemes will now apply to employees.

The ministry informed that since 1952-1953, Air India and Indian Airlines were two separate companies covered under the PF Act of 1925. In 2007, the two companies merged into a single company, Air India Ltd.

Based on plan parameters, accruals were paid to employees. There was no guaranteed minimum pension or additional benefit in the event of a member’s death.

Share.

About Author

Comments are closed.