Jan. 29—Around 7,453 employees of Air India will receive an extra 2% employer's contributions in the provident fund accounts at 12% of their wages as the Employees' Provident Fund Organisation (EPFO) has onboarded Air India for the social security coverage. Air India had applied for voluntarily covered u/s 1(4) of the EPF and MP Act 1952 which has been allowed through a gazette notification dated January 13 with the effect from December 1, 2021.
Earlier, the employees were covered under the PF Act of 1925, like all government organisations, where the contributions to the provident fund were at 10% by the employer and 10% by the employee. Under the EPF Act which is now covering Air India, a guaranteed minimum pension of Rs1,000 will be available to employees and to family and dependents in case of death of an employee. An assured insurance benefit in case of death of a member will be available in the range of minimum Rs2.50 Lakh and a maximum Rs7 Lakh. No premium is charged to the EPFO covered employees for this benefit.
"Since 1952-53, Air India and Indian Airlines were the two separate companies that were covered under PF Act 1925. In 2007, both the companies merged into one company- Air India Ltd. Under the PF Act 1925, the benefit of Provident Fund was available but there was no statutory pension scheme or insurance Scheme. The employees used to participate in self-contributory annuity-based pension scheme. 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," a statement of the ministry of labour and employment said.
Air India has officially been handed over to the Tata Group after all formalities of the divestment process was completed on January 27.
Earlier, it was clarified that the current employees of Air India will be retained for a year and there will be no layoffs. In the second year, if old employees are sacked then that will be considered as paid VRS.
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