Key Takeaways
- • The Employees' Provident Fund Organisation (EPFO), a statutory body under the Ministry of Labour & Employment, is moving to appoint an actuary or actuarial firm to provide consultancy on insurance and staff pension matters, according to Business Standard.
- • The consultant's mandate covers annual valuation of the Employees Deposit Linked Insurance (EDLI) scheme fund, valuation and projection of the EPF staff pension cum gratuity scheme, leave encashment, and any other scheme for EPFO employees.
- • The request for proposal was issued on a Friday, with the selection process slated to commence by August 17, and the approved consultant to be empanelled with EPFO headquarters in New Delhi for a one-year tenure.
- • The appointed actuary will also project the impact of proposed EDLI-76 scheme amendments, including changing benefit eligibility for nominees from death while in service to death as an EPF member who has not withdrawn accumulations.
- • EPFO had separately issued an RFP earlier in the year to study the Employee Pension Scheme (EPS)-1995, following the November 4 Supreme Court judgment that upheld the 2014 cap on pensionable salary at Rs 15,000 per month.
Summary
The Employees' Provident Fund Organisation (EPFO) is in the process of appointing an actuary firm to provide consultancy on matters related to insurance and staff pension cum gratuity, according to Business Standard. The statutory body under the Ministry of Labour & Employment issued a request for proposal (RFP) seeking an actuary or actuarial firm to carry out the annual valuation of the Employees Deposit Linked Insurance (EDLI) scheme fund. The scope also includes the valuation and projection exercise of the Employee Pension Fund (EPF) staff pension cum gratuity scheme, leave encashment, and any other scheme for EPFO employees that may be introduced during the consultant's tenure.
The proposal was issued on a Friday, and the selection process is slated to commence by August 17. The approved consultant will be empanelled with EPFO headquarters in New Delhi for a tenure of one year. According to the proposal, the appointed actuary will also model the impact of proposed amendments to the EDLI-76 Scheme, including a change in the criteria for benefits to family members, nominees, or dependents. Under the proposed change, eligibility would shift from death while in service, meaning an employee who is a member, to death as an EPF member, meaning a member who has not withdrawn EPF accumulations.
The RFP follows an earlier EPFO solicitation to appoint an actuarial consultant to study the Employee Pension Scheme (EPS)-1995 and recommend measures to enhance benefits while preserving the scheme's sustainability. That review concerns the impact of the November 4 Supreme Court judgment, which upheld the 2014 amendment capping the basic salary used for pension calculation at Rs 15,000 per month. The court invalidated a separate amendment requiring an additional 1.16 per cent contribution from employees.
EPFO is one of the largest social security organisations in the world, with nearly 69 million active contributory members across close to 690,000 establishments in India. As of March, the organisation's total corpus stood at over Rs 21.36 trillion, and EDLI scheme membership was approximately 28 crore.
The proposal was issued on a Friday, and the selection process is slated to commence by August 17. The approved consultant will be empanelled with EPFO headquarters in New Delhi for a tenure of one year. According to the proposal, the appointed actuary will also model the impact of proposed amendments to the EDLI-76 Scheme, including a change in the criteria for benefits to family members, nominees, or dependents. Under the proposed change, eligibility would shift from death while in service, meaning an employee who is a member, to death as an EPF member, meaning a member who has not withdrawn EPF accumulations.
The RFP follows an earlier EPFO solicitation to appoint an actuarial consultant to study the Employee Pension Scheme (EPS)-1995 and recommend measures to enhance benefits while preserving the scheme's sustainability. That review concerns the impact of the November 4 Supreme Court judgment, which upheld the 2014 amendment capping the basic salary used for pension calculation at Rs 15,000 per month. The court invalidated a separate amendment requiring an additional 1.16 per cent contribution from employees.
EPFO is one of the largest social security organisations in the world, with nearly 69 million active contributory members across close to 690,000 establishments in India. As of March, the organisation's total corpus stood at over Rs 21.36 trillion, and EDLI scheme membership was approximately 28 crore.
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