19 November 2008
a) Superannuation Fund is a retirement benefit given to employees by the Company. b) Normally the Company has a link with agencies like LIC Superannuation Fund, where their contributions are paid. c) The Company pays 15% of basic wages as superannuation contribution. There is no contribution from the employee. d) This contribution is invested by the Fund in various securities as per investment pattern prescribed. e) Interest on contributions is credited to the members account. Normally the rate of interest is equivalent to the PF interest rate. f) On attaining the retirement age, the member is eligible to take 25% of the balance available in his/her account as a tax free benefit. g) The balance 75% is put in a annuity fund, and the agency (LIC) will pay the member a monthly/quarterly/periodic annuity returns depending on the option exercised by the member. This payment received regularly is taxable. h) In the case of resignation of the employee, the employee has the option to transfer his amount to the new employer. If the new employer does not have a Superannuation scheme, then the employee can withdraw the amount in the account, subject to deduction of tax and approval of IT department, or retain the amount in the Fund, till the superannuation age.
Normally Companies do not extend the Superannuation benefits to all employees- but only to a specific category of employees - like for example Level-1 of Managers onwards..
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