The person will not be eligible for gratuity if he does not complete 5 yrs. LIC's Group Gratuity Scheme is a fund created to meet future liability and as such will have no impact on an employee leaving before 5 years. At the most contribution for next year will get reduced because 1 person has left and there is no liability on his account.
From India, Hyderabad
In any case, the contribution is given as a lumpsum for the group policy and no amount is assigned to any specific employee for a gratuity policy. The amount is lying with the LIC and there is no loss to the Company.
Hope this would help you.
Manager - Business Development
avika dot kapoor at kapgrow dot com
From India, New Delhi
LIC is like a fund manager , and will invest in various financial instruments to see that the Group Gratuity fund also grows, instead of idling the contributions made by us. therefore, even though we contribute an amount for the bunch of employees, LIC will keep it as a fund in total.
If an employee leaves in less than 5 years, the contributions paid towards this employee will remain in group gratuity fund itself, and they will not return to the company back, as they will not be keeping employeewise fund.
Every year we are expected to send fresh list of employees in addition to sending the details of employees who have joined / left, LIC will intimate the gratuity liability based on actuarial method of valuation and addition and deletion in the amount will be done by them based on the list sent by us once a year.
From India, Bangalore
Hope the same is correct.
From India, Kakinada
The assessment of gratuity liability is made by LIC on an annual basis. The amount you pay as premium for the policy goes into a fund account maintained by LIC. Every premium payment adds to the fund value and every gratuity settlement reduces the fund value by the amount settled. The premium demanded annually is fixed by estimating the current gratuity liability and the existing fund value (with LIC).
The gratuity liability, say for the year 2010-11, is calculated based on the employees working as on the date of renewal of the policy for that year( say as on 27/05/2010). This done based on the list of employees you furnish to LIC. When you do this, you automatically include new employees and delete those who have resigned or superannuated. LIC calculates the liability for the persons employed as on date, taking into account the existing funds available in the fund account it maintains for meeting the estimated gratuity liability if it arises immediately .
If the fund is lesser by XXXX amount then it asks you to pay such amount as premium. This automatically includes the amount you have already paid as premium during the last year(s) for an employee who left the service. As such the premium liability automatically gets adjusted in the next year premium payable.
From India, Madras
If the new firm to which the ex-employee has joined is also a Public Sector Under the Government of India, then the condition for transfer of the benefits/contributions of Gratuity to the new Central PSU employer can be thought of. Please look into this possibility.
From India, Mangaluru
We have GGPE Scheme with LCI, We got letter from Income Tax office. I am not able to understand the meaning of below two points. Request you to please explain -
1) Ordinary Annual Contribution as per Rule 103 of the Income Tax Act – as per rule it should not exceed 8 1/3% of the salary of each employee during each year. As per Company Rules, it shall be 15% of the Member’s Annual Salary.
2) Initial Contribution exceeds limit prescribed in Rule 104 of the Income Tax Act - as per I.T. rule it should not exceed 8 1/3% of the salary of each employee of his past service with the employer. As per Company Rules, it shall not exceed 15% of the Salary received during past years.
From India, Pune
I have few doubts;
1. Will this contribution to be given by the employee or employer...
2. If an employee already completed more than 5 yrs in the organization, and this group gratuity starts from this month only, will they also be eligible for this benefit & how it is calculated.
3. Is this group gratuity remittance made on a monthly or yearly basis.
From India, Mumbai
In my co. we have LIC Group Gratuity Scheme. One of my colleague retired from co. but unfortunately his gratuity (worked for more than 10 yrs.)was not claimed during the period. Now after 2 yrs., when he claimed his gratuity to company, the company said that LIC will not pay gratuity amount as his claim was not submitted within the period. So, my question is that is it true what the company told to my company? and if it's true, then what will be the possible way to get his gratuity?
From India, Chennai