Académique Documents
Professionnel Documents
Culture Documents
and
Pension Schemes
Employee Benefits
1.
2.
3.
4.
5.
6.
Types of employee
benefits
Personal security
Health care
Insurance cover
Sick pay
Redundancy pay
Career counseling
Financial assistance
Company loan
Season ticket loan
Mortgage assistance
Relocation packages
Fees to professional bodies
Cont..
Personal needs
maternity and paternity leave and pay above the
statutory minimum
leave for personal reasons
childcare through workplace nurseries or vouchers;
pre-retirement counseling
personal counseling through employee assistance
programmes
sports and social facilities
company discounts
retail vouchers to buy goods at chain stores
Holidays
a minimum of 20 days paid holiday per year, including bank
holidays.
Basic holiday entitlements are typically five weeks plus bank
holidays,
The entitlement for holiday begins to accrue on the first day at
work.
Company cars
still remain one of the most valued perks, perhaps because
Other benefits
free car parking, Christmas parties and tea/coffee/cold drinks
Concierge services
include dealing with home and car repair and maintenance,
financial services, buying presents, restaurant reservations,
theatre tickets and travel arrangements.
Administering benefits
can be expensive
There should be a budget for employee
Flexible Benefits
1.
2.
3.
4.
benefits and select new benefits from the menu provided. The
value of the benefits bought and sold is then aggregated and the
net amount added to or deducted from pay.
Flex fund
Employees are allocated a fund of money to
spend on benefits from a menu. This is
therefore sometimes described as the
cafeteria approach.
The value of the flex fund is big enough to
enable individual employees to buy their
existing benefits and thus retain them without
additional cost.
described below:
Define business need
Seek views
Decide objectives and essential elements
Set up project team
Decide who is going to carry out the development work
Design scheme
Communicate details of the scheme
Pilot test
Introduce scheme
Evaluate scheme
Pension Schemes
1. The nature of occupational pensions
2. Why they are provided
3. The two main types of occupational schemes
Employee and employer contributions are paid into a combined fund and there is no direct link between fund size and the
pensions paid.
The money remaining in the fund after any lump sums have been taken out is invested in an annuity to provide a regular
income, the amount of which may be revised upwards periodically to compensate for inflation.
Dependants
Dependants are entitled to a percentage of the employees pension entitlement if he or she dies during retirement or in
service with the company.
Lump sum
Part of the pension may be exchanged for a tax-free lump sum, up to a maximum under Inland Revenue rules of 1/80th per
year for up to 40 years service.
Contributions
The employer contributes a defined percentage of earnings, which may be fixed, age-related or
linked to what the employee pays. The level of employer contribution is typically around 6 per cent.
The employee also contributes a fixed percentage of salary.
Pension fund
The contributions are invested and the money used at retirement to purchase a regular income,
usually via an annuity contract from an insurance company. The retirement pension is therefore
whatever annual payment can be purchased with the money accumulated in the fund for a member.
Members have individual shares of the fund, which represent their personal entitlements and which
will directly determine the pensions they receive.
Dependants
The employee receives a pension on retirement that is related to the size of the fund accumulated
by the combined contributions of the employee and employer. The amount of the pension depends
on the size of contributions, the rate of return on the investment of the accumulated fund and the
rate of return on an annuity purchased by the employer. It is not related to the employees final
salary.
Dependants receive death in service and death in retirement pensions. 398 Employee Benefit and
Pension Scheme
Lump sum
investment.
About the general principles to be borne in mind when comparing an
occupational pension scheme with a personal pension; these could include
spelling out the benefits of the companys scheme, thus leaving employees
in a better position to compare the benefits with whatever an authorized
adviser may indicate are the benefits from a personal plan. What should not
be done is to tell people categorically that they will be better off with the
companys scheme or to advise them to look elsewhere.
On their rights, for staff who are leaving, to preserve their pension and the
advisability of finding out from their prospective employer whether existing
rights can be transferred to their scheme and, if so, what the outcome will
be in terms of pension rights at the new company.
On the general advantages of making additional voluntary contributions.
PFRDA
The Pension Fund Regulatory and
National Pension
scheme(nps)
National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme designed
to enable the subscribers to make optimum decisions regarding their future through systematic savings
during their working life. NPS seeks to inculcate the habit of saving for retirement amongst the citizens.
It is an attempt towards finding a sustainable solution to the problem of providing adequate retirement
income to every citizen of India.
Under the NPS, individual savings are pooled in to a pension fund which are invested by PFRDA regulated
professional fund managers as per the approved investment guidelines in to the diversified portfolios
comprising of government bonds, bills, corporate debentures and shares. These contributions would grow
and accumulate over the years, depending on the returns earned on the investment made.
At the time of normal exit from NPS, the subscribers may use the accumulated pension wealth under the
scheme to purchase a life annuity from a PFRDA empanelled life insurance company apart from
withdrawing a part of the accumulated pension wealth as lump-sum, if they choose so.
planning the growth of your investments in a reasonable manner and see your money grow.
Individuals can switch over from one investment option to another or from one fund manager to
another subject, of course, to certain regulatory restrictions. The returns being totally market-related.
Simple Opening an account with NPS provides a Permanent Retirement Account Number (PRAN),
which is a unique number and it remains with the subscriber throughout his lifetime. The scheme is
structured into two tiers:
Tier-I account:This is the non - withdrawable permanent retirement account into which the accumulations
I account in the name of the subscriber. The withdrawals are permitted from this account as per the needs of
the subscriber as and when claimed.
Portable-NPS provides seamless portability across jobs and across locations, unlike all current
pension plans, including that of the EPFO. It would provide hassle-free arrangement for the individual
subscribers.
Regulated-NPS is regulated by PFRDA, with transparent investment norms, regular monitoring and
performance review of fund managers by NPS Trust.
servant of the Government belonging to any of the services under the control of the President.
A subscriber, at the time of joining the Fund is required to make a nomination in the prescribed
Form conferring on one or more persons the right to receive the amount that may stand to his
credit in the Fund in the event of his death, before that amount has become payable or having
become payable has not been paid.
A subscriber shall subscribe monthly to the Fund when on duty or Foreign Service but not during
the period of suspension. Rates of subscription shall not be less than 10% of the emoluments and
not more than his emoluments.
The employer's contribution at that percentage prescribed by the Government will be credited to
the subscriber's account and this is 10%. Rate of interest with effect from 1.4.2009 is 8%
compounded annually. The Rules provide for drawl of advances/ withdrawals from the CPF for
specific purposes.
continuous service of one year, all re-employed pensioners (Other than those eligible for admission to the
Contributory Provident Fund) and all permanent Government servants are eligible to subscribe to the Fund.
A subscriber, at the time of joining the fund is required to make a nomination, in the prescribed form,
conferring on one or more persons the right to receive the amount that may stand to his credit in the fund
in the event of his death, before that amount has become payable or having become payable has not been
paid.
A subscriber shall subscribe monthly to the Fund except during the period when he is under suspension.
Subscriptions to the Provident Fund are stopped 3 months prior to the date of superannuation.
Rates of subscription shall not be less than 6% of subscriber's emoluments and not more than his total
emoluments. Rate of interest on GPF accumulations with effect from 1.4.2009 is 8% compounded annually
and the rate of interest will vary according to notifications of the Government.
NDCPF