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Thread Started by #crkesavan

I am a Financial planner. One of my clients from SME catogory has a question. Payment of Gratuity is for workers who have completed 5 yrs of service. If a person leaves before that, what will happen to the contribution made by the employer to LIC's Group Gratuity Scheme?
25th May 2010 From India, Bangalore
Hi
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.
Regards
26th May 2010 From India, Hyderabad
LIC calculates the amount of premium payable based upon various factors like the date of joining, age, current salary drawn etc and then the actuarial valuation of the same is done so as to arrive at a figure that would make the fund size such that would be sufficient to meet the obligation of the Company in the event of people leaving the Company during that year. They would not consider the people who have not completed period of 5 years or are not likely to complete the period of 5 years during the period for which the premium is being paid.

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.

Thanks,

Kind Regards,

Avika Kapoor

Manager - Business Development

avika dot kapoor at kapgrow dot com
26th May 2010 From India, New Delhi
Hi,
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.
Regards,
Guruprasanna B.K.
27th May 2010 From India, Bangalore
According to my knowledge, the amount accrued in respect of the employee who quits the job even before completing required service of 5 years, the LIC will inform the company to deduct the same in the next premium payable by the company towards remaining employees.
Hope the same is correct.
Regards
PVVB KUMAR
27th May 2010 From India, Kakinada
Dear Mr.CRKesavan,

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.

DThirugnanam
27th May 2010 From India, Madras
Hai,
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.
Regards
Premson
28th May 2010 From India, Mangaluru
We want to initiate lic group gratuity in our company can any send me some advisor with whom we contact with for initiation of the process. Regards amit roy 8981390903
22nd March 2011 From India, Bangalore
Hello,
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.
Regards
Sagar
12th February 2014 From India, Pune
Hi All,
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.
Regards
Edward Daniel
cedr_dan@yahoo.com
27th April 2015 From India, Mumbai
Hi,
We want to make provision for Gratuity. Can any one guide me about LIC-Group Gratuity Scheme. What is the calculation? Is it a benefit for the company or one kind of risk level policy?
Please explain me in detail.
28th December 2015 From India, Ahmedabad
Hi all,
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?
9th June 2016 From India, Chennai
Hi All,
Please find attached the details of LIC Group Gratuity Cash Accumulation Plan.
7th March 2018 From India, Kochi

Attached Files
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File Type: pdf LICs_New_GGCA.pdf (104.4 KB, 197 views)

HI Memeber,
Can any body guide me how to claim the Gratuity under GGCA scheme of LIC.
An employee is working for more then 10 years in the company that time Gratuity scheme was not implemented in the company and his age was 58 years, and GGCA scheme was implemented in 2017 when his age reach to 60 Years. where as policy has age limit of 58 Years. In such condition can this employee are eligible for gratuity benefit for the period he has worked for the company. if not what about the gratuity contribution deducted from his salary?Please suggest.
Rishi Jalan
28th March 2018 From India, Delhi
Hi. I am B. Gururaja, working in LIC in the capacity of Sr. Manager, having 25 years of experience, now catering to Corporate needs of Employee Benefit schemes like Gratuity, Superannuation, Leave Encashment, Group term Insurance, Group Insurance in lieu of EDLI by PF, etc.
If any of you are interested, please let me know. You can contact me on 9066307727 or mail me on .
29th September 2018 From India, Chennai
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