Respected seniors
This is Ramu working as Junior Manager-HR in a manufacturing unit at vijayawada. We would like to introduce superannuation policy in our company. I request the seniors any one can guide me about calculations, benifits and eligibility norms
With regards

From India, Vijayawada
Dear Mr. Ramu-HR,

The employee who attains the age of retirement is generally reffered to be in Superannuation. Superannuation Fund is a method that is designed to provide certain amount for your retirement. Mostly, schemes from LIC's and other private insurance companies have these schemes tied up with the employer to make your savings work more effective; considered tax free in the contributions made. Superannuation paid to you is Superannuation is 15% of the basic and should not go beyond 27% when combined with PF under the Income Tax Act.

Gratutiy is one such benefit paid to the employee after performing a continuos service for 5 years with the same employer. Gratutiy is made a compulsory, statutory benefit provision under The Payment of Gratuity Act, It is paid 15 days of each year completed Gratuity is 4.81% of the basic.

It can be calculated as follows -

Gratuity Amount = Basic salary (last drawn) / 26days x 15days x No. of years service

All forms and formats related to superannuation will be available with the HR. The payment will be received to you after suabmitting the requisited forms spanning a max @ 45 days.

From India, Visakhapatnam
Dear Mr. Ramu,
Superannuation Scheme is effected by the Company to provide monthly pensionery benefits to its employees on retirement. Under the Income Tax Law, a Company can contribute to the maximum of 27% of the Basic Wages/Salaries for the Employees Benefit Schemes such as Provident Fund/ Superannuation Schemes. It can invest upto a maximum of 12% in Provident Fund Scheme (which is contributory) and balance 15% in Superannuation Scheme (which is non contributory).
Superannuation Scheme provides two methods of calculating benefits to the employees. One method is to fix the amount of pensionery benefits in advance (defined benefit scheme) and the other is to contribute at a fixed percentage periodically (defined contribution scheme). The pensionery benefits are arrived at seeing the accumulated Credit balance of the member at the time of Superannuation (Retirement).

From India, Kota
Dear Mr. Ramu,

For the implementation of SAS need to form trust and rules and regulation for the administration of the scheme. Before tie up to any company please check their return/ Performance record. We are tie up with ICICI PRU life which give us average 8-9 % earning p.a. The government has launched National Pension Scheme (NPS)w.e.f 1/4/2004 for the governmental employees. Any employee, private or government can join this scheme but its a mandatory for governmental employees who joined after 1/4/2004. Under the SAS only employees contribution is eligible for tax deduction under section 80 c however under the NPS both contribution are eligible for tax exemption under section 80 CCD(2) subject to maximum of 10 % of the basic pay. This NPS is regulating by Pension Fund Regulatory and Development Fund (PFRDA). The PFRDA has announced one scheme for private/corporate employees. New members Enrollment under SAS is stopped by IRDA. So if you think to start new SAS you can not do that. please check with IRDA. For more details for NPS you may visit


NK Panchal

From India, Anand
Dear Ramu,

I appreciate your concern for the welfare of your employees. I'm not sure how many employees you have to cover under your SAS. I trust EPF is already implemented for your employees. What are left to be covered-

1. Gratuity

2. Pension - ( If they are PF members EPS would also apply)

3. Insurance - Medical & Life & Accident.

4. Bonus, if eligible

5. Leave encashment

6. Employees' Death & Welfare Fund

7. Parting gift, if any.

I am not sure whether you have already taken decision reg. age for superannuation - there are diff. ages in vogue like 55 yrs. 58, 60 etc. This is left your discretion.

Reg. EPF & Gratuity - if your firm is legally eligible you can set up trust(s) and manage them by employees' committees which quicken the process of governing & settlements to the retiring employees. This is because of operational difficulties being faced when settlement claims are unduly delayed by various agencies like LIC,

You may consider various aspects for this purpose.


From India, Bangalore
Hi, Mr. NK Panchal is absolutely correct, now you can not enroll for new SAS membership. NPS is best right now. regards, Shashi
From India, Mumbai

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