Group Superannuation provides retirement benefits offered by employers to their employees, allowing them to save a portion of their income during their employment. Offering such benefits through superannuation insurance enhances Employee Benefit Policies.
Defined Benefit Scheme
In this scheme, the employer provides a specific retirement benefit based on the salary and years of service. The plan is funded by employer contributions only. It is also called Non-Linked Non-Participating Annuity Plans.
Defined Contribution Scheme
In this scheme, both employees and employers contribute towards fund accumulation. Contributions to the fund are proportional to the salary.
Financial Security
Ensures a steady income post-retirement, providing financial stability.
Tax Advantages
Contributions and earnings in the fund enjoy tax benefits, reducing overall tax liability.
Long-term Savings
Encourages disciplined saving habits among employees for their retirement years.
Tax Deductibility
Contributions made by the employer towards the superannuation fund are treated as business expenses and are deductible under Section 36(1)(iv) of the Income Tax Act.
Income Exemption
Any amount received by the Trust (Fund Administrator) on behalf of the approved Superannuation fund is exempt under Sec 10(25)(iii) of the Income Tax Act.
Contribution Limits
The amount of deduction available under any ordinary superannuation fund shall not exceed 27% (including Provident Fund contribution) of the employee's basic salary.
Section 80C Deduction
Employees' contributions towards an approved superannuation fund are eligible for deduction under Section 80C.
Tax-Free Payouts
The payment received from the superannuation fund is tax-free, subject to conditions under Section 10(13).
Structured Retirement Plan
Provides employees with a well-structured retirement plan, ensuring they have sufficient savings for their retirement years.
Professional Fund Management
The fund is managed by professional fund managers, ensuring optimal returns on the contributions.
Customizable Options
Employers can customize the plan according to the needs of their employees, offering flexibility in contributions and investment choices.
Setting Up the Plan
The employer sets up the superannuation plan with an insurance provider or a trust.
Contribution
Regular contributions are made by the employer, and optionally by the employee, to the superannuation fund.
Investment of Funds
The contributions are invested in various financial instruments as per the chosen investment strategy.
Accumulation
The funds accumulate over time, earning returns on the investments made.
Payout at Retirement
Upon retirement, the employee receives the accumulated funds in the form of a lump sum, annuity, or a combination of both.
Employer Creates a Trust
For administration of the fund under the Superannuation Plan.
Finalize the Scheme
Decide whether to go with 'Defined Benefit Scheme' or 'Defined Contribution Scheme.'
Discuss Investment Preferences
Discuss investment preferences and strategies with the Insurance Broker and Insurance Company.
Contribute and Review
Contribute to the fund and review investment return and fund growth periodically.
Retirement Savings
Systematic approach to building retirement corpus through regular contributions.Multiple Payout Options
Flexible payout options including lump sum, annuities, or combination of both.Investment Options
Various investment choices based on risk appetite and financial goals.Ready to Protect Your Business?
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