EPFO has onboarded Air India and its employees will now get pension and insurance cover
New Delhi:
Employees’ Provident Fund Organisation (EPFO), has taken on board Air India Limited for providing social security benefits like provident fund (PF), pension and insurance to its employees. It has received contributions for around 7,453 employees for December 2021.
This step was a part of the overall privatisation of the national carrier, as its employees have now come under the ambit of the Employees’ Provident Fund & Miscellaneous Provisions Act 1952, with effect from December 1, 2021.
According to the gazette notification, the employer and majority of the employees have agreed to shift to provisions under the EPFO.
Prior to this shift, Air India employees were contributing in the provident fund and the money was channelised into 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. These two funds were recognized under Provident Fund Act 1925.
With this gazette notification, the airline has completed the process of shifting employees from the old PF to the new system.
Under the PF Act, 1925, benefit of provident fund was available but there was no statutory pension or insurance scheme. The employees used to participate in self-contributory annuity-based pension scheme.
A guaranteed minimum pension of Rs 1,000 per month will be available to employees and pensions to family and dependents in case of death of employee.
An assured insurance benefit in case of death of member will be available in the range of minimum Rs 2.50 lakh and maximum 7 lakh.
No premium is charged to the EPFO covered employees for this benefit.
The Tata Group has taken over the debt-ridden airline from the government. Air India had applied for EPFO coverage, which has been allowed, the retirement fund body said.
“EPFO onboards Air India for social security coverage to service the social security needs of their employees. Air India Ltd applied for voluntarily covered u/s 1(4) of the EPF & MP Act, 1952 which has been allowed … with effect from December 1, 2021,” the labour ministry said in a statement issued on Saturday.
These employees of Air India now will be entitled to benefits like they will receive extra 2 per cent employer’s contributions in their provident fund (PF) accounts at 12 per cent of their wages.
Earlier they were covered under the PF Act of 1925, where the contributions to the PF was at 10 per cent by employer and 10 per cent by employee.
The EPF Scheme 1952, EPS 1995 (employees pension scheme) and EDLI 1976 (group insurance) will now be applicable to the employees.
The ministry informed that since 1952-53, Air India and Indian Airlines were two separate companies that were covered under PF Act, 1925. In 2007, both the companies merged into one company, Air India Ltd.
Based on the scheme parameters, the accumulations used to be paid to the employees. There was no minimum pension guarantee and no extra benefit in case of death of a member.