After Tata group's takeover of the State-owned Air India, the Employees' Provident Fund Organisation (EPFO) has on-boarded the airline for social security coverage to provide the social security benefits to its 7453 employees. According to the Ministry of Labour and Employment, these employees will receive extra two per cent employer’s contributions in their Provident Fund Accounts at 12 per cent of their wages.
“The social security benefits will be provided to around 7,453 employees for whom contributions have been filed by Air India with EPFO for the month of December 2021,” the Ministry said.The approval was granted on January 13 after Air India Ltd applied for voluntarily cover under the EPF and MP Act 1952.
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 Rs 1,000 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 Rs 2.50 Lakh and a maximum Rs 7 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.