Group Gratuity Plan Group Gratuity Scheme : Under section 4A of the Payment of Gratuity Act,1972
Gratuity sum is required to be guaranteed by the businesses. In this setting Life Insurance Corporation of India has glided an approach for protection of tip to the workers of organisation. Under the above , a trust is required to be set up by the business for the reasons for dealing with the tip reserves. Trust will make a reserve with the LIC against instalment of tip. Commitment towards the store are for the most part implied by LIC to trust on yearly premise. This figuring depends on accturial premise. The other part is protection of the reserve. Trust will manage the LIC for installment of commitments towards the tip store and Insurance premium for the protection of tip to the workers of the company. These premiums are to be paid on yearly premise.
Benefit of the same to the employer is that the contributions paid by employer to gratuity trust will be recognised as expenses for the year in balance sheet though these are to be utilised in future. Further in case a big number of employees leave organisation at one time , the financial burden on the emloyer will not be directly proportionate to the number of employees left. The reason is that the employer has already discharged his liability in parts and has paid annual premium.
The other biggest benefit is that in case of death of an employee during the course of employment , the nominee will get gratuity amount not only for the period of rendered services but till the date of retirement. This part is being taken care by LIC against the insurance premium paid by employer.
It is suggested that before making trust rules ( Model copies are generally provided by the LIC) please go through the same and amend as per your requirement. This trust is also required to be recognised by Income Tax Authorities. This part is being taken care by LIC.
Click the links below for different Group gratuity trust Plans.
1. http://www.futuregenerali.in/…/Produ…/grp_gratuity_plan.aspx
2. http://www.maxnewyorklife.com/…/unit_linked_group_gratuity.…
3.http://www.iciciprulife.com/public/Brochures/Gratuity.pdf
4.http://www.sbilife.co.in/sbilife/content/10_2443
Benefit of the same to the employer is that the contributions paid by employer to gratuity trust will be recognised as expenses for the year in balance sheet though these are to be utilised in future. Further in case a big number of employees leave organisation at one time , the financial burden on the emloyer will not be directly proportionate to the number of employees left. The reason is that the employer has already discharged his liability in parts and has paid annual premium.
The other biggest benefit is that in case of death of an employee during the course of employment , the nominee will get gratuity amount not only for the period of rendered services but till the date of retirement. This part is being taken care by LIC against the insurance premium paid by employer.
It is suggested that before making trust rules ( Model copies are generally provided by the LIC) please go through the same and amend as per your requirement. This trust is also required to be recognised by Income Tax Authorities. This part is being taken care by LIC.
Click the links below for different Group gratuity trust Plans.
1. http://www.futuregenerali.in/…/Produ…/grp_gratuity_plan.aspx
2. http://www.maxnewyorklife.com/…/unit_linked_group_gratuity.…
3.http://www.iciciprulife.com/public/Brochures/Gratuity.pdf
4.http://www.sbilife.co.in/sbilife/content/10_2443
1 comment:
Gratuity is a sum of money paid to an employee by an employer in recognition of good service. It is typically paid at the end of a contract or upon termination of employment.
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