Misleading Superannuation Fund In Salary Component

I am working in a small I.T Company at Bangalore, India.
We have a misleading superannuation fund in our salary component which was Started effective from 1st April 2007, but it was not at all mentioned in any of the HR policy/Employee hand book or in any of the notice/circular. Whenever it was asked by any Employee to the HR it was explained verbally not by email or any official communication, that it is not maintained by the LIC but it is company managed and the eligibility for this found is 5 years.
As far as we know the company has not made any trust and is not buying any secure bonds or any such thing for employee benefit. On last week of completion of 5 years, the COO of the company has informed the HR to publish a policy in the HR portal and mention the Superannuation Policy which will have the eligibility criteria as retirement from the company at the age of 58 years.
How far it is fair? Can the company do like this?

Holding money of employees (amounts deducted from the salaries other than those mentioned under section 7 of the Payment of Wages Act) without a registered trust seems to be illegal. You may take a legal opinion in this regard.
Regards,
Madhu.T.K

Dear Mathu,
My company also maintained Superannuation fund with LIC and the superannuation contribution (10% of basic salary) included in CTC. But if the employee left before 5 years , he can't get the benefit / contribution amount. please clarify if any possibility to return back.
Regards
K Subu

If it is a deduction from salary you are bound to refund it. On the other hand if it is not a salary portion but only a benefit to employees, you need not refund it if the employee does not qualify to get it as per the Policy.
The problem with CTC is that you make all expenditure as part of CTC which will become a legal issue latter on. Moreover, you are deducting it from the salary. That means you have to pay it back.
Madhu.T.K

Superannuation payment in c.t.c. and excluding gross salary is a benefit from employer's side by adding 15% of basic+d.a. of 12months salary to LIC and the period of 5yrs or decided by the group superannuation trust-trustees and beneficiaries, superannuation is payable as per the
decided period of service rendered, so if employee leaves before completion of "super annuity" (ctc part)service period say 5yrs, in this case, superannuation is not payable.
Becasue Suerpannuation is part of ctc+ its pension-like scheme and Employer's financial welfare to the employee for rendering continues job.