Understanding the EDLIS Scheme: Do New Employees Need to Enroll and Contribute?

Hi Sheena,

I have joined a new company as an HR assistant. Could someone please explain what the EDLIS scheme is? When a new employee joins the organization, do they automatically become a part of the Employees' Deposit Insurance Scheme, or do they need to fill out a specific form for it? If so, could you please inform me of the form's name?

In the EDLIS scheme, will the employer deposit the contribution alone, or will the employee also need to contribute to it? Furthermore, in the unfortunate event of an employee's passing, what amount will the nominee receive?

Thank you,

Sheena

Hi Sheena,

Before I discuss the E.D.L.I. Scheme, I would like to inform you that there are three schemes under The Employees Provident Fund & Misc. Provisions Act -1952:

1. Employees Provident Fund Scheme (EPF)
2. Employees Pension Scheme (EPS)
3. Employees Deposit Linked Insurance Scheme (EDLI)

Now,

EDLI is a Scheme under the Employees Provident Fund & Misc. Provision Act - 1952. An employee automatically becomes a member of the scheme if they are a member of the Employees Provident Fund Scheme (even after reaching the superannuation age of 58 years if they continue employment, but ceases to be a member of the Pension Scheme upon attaining 58 years).

There is no need to fill any separate form to become a member of the EDLI Scheme under the EPF Act. (Form - 2 Nomination & Declaration is sufficient).

No contribution in respect of the EDLI Scheme shall be paid by the employee; rather, the contribution for the EDLI Scheme shall be borne by the Employer only (0.5% of Basic Wages).

Upon the death of an employee while in service, Form (5 IF) shall be filled by the employer along with the death certificate for the purpose of the death Assurance benefit amount to be paid to the nominee of the employee.

The amount payable under the EDLI Scheme as an Assurance benefit on the death of a member while in service is linked with the accumulation in the member's P.F. Account as follows:

1. The average balance in the member's PF account during the last 12 months or during the period of his membership, whichever is less. If the average balance is more than Rs. 35,000, the amount payable shall be Rs. 35,000 plus 25% of the amount in excess of Rs. 35,000, subject to a maximum of Rs. 60,000 payable to the nominee.

I hope this clarifies your query further. You can also reach out to me via email at mak007hr@rediffmail.com.

Thanks,

Mohd. Arif Khan

Hi Jayshree,

You sound quite knowledgeable in PF background. I have one query. My company was having a tie-up with a manufacturing unit that was supporting the company financially. Now, starting from next month, we will operate as an independent company with a staff of 10 employees. Can you provide me with details about PF?
1. How can we apply for PF?
2. What are the formalities to register the company under EPF?
3. Documents required, etc.

You can also email me at jayshree15@rediffmail.com. We are based in Mumbai.

Regards,
Jayshree