employee benefits

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employee benefits

  1. 1. EMPLOYEE BENEFITS IN INDIA - the emerging trends
  2. 2. Population in excess of 1 Billion 35 States and Union Territories 24 Languages 7 Religions 3000 communities
  3. 3. INDIA <ul><li>Diversity in language, culture and religion </li></ul><ul><li>Does this diversity extend to employee benefits? </li></ul><ul><li>Yes & No </li></ul>
  4. 7. Overview of Employee Benefit Scenario In India Employee Compensation Salary Allowances & Bonus Employee Benefits
  5. 8. Overview of Employee Benefit Scenario In India Employee Benefits Provident Fund Gratuity Personal Accident Mediclaim Leave Encashment Life Insurance Super-annuation Mandatory Voluntary
  6. 9. Employee Benefits – Insurance Co’s viewpoint Employee Benefits Insurance Retirement Defined Contribution Defined Benefit Life Accident Mediclaim Leave Encashment Gratuity Superannuation
  7. 10. Mediclaim Insurance <ul><li>Reimbursement of medical expenses following hospitalization </li></ul><ul><li>Cash less hospitalization facility available under certain plans </li></ul><ul><li>Tax deduction available for the business </li></ul>Accident Insurance <ul><li>Can offer compensation for any/all of the following: </li></ul><ul><ul><li>Accidental death, disability </li></ul></ul><ul><ul><li>Medical expenses for treatment post accident </li></ul></ul><ul><li>List of exclusions </li></ul><ul><li>BOTH BENEFITS ARE OFFERED BY NON-LIFE INSURANCE COMPANIES </li></ul>
  8. 11. Life Insurance <ul><li>Benefit payable on accidental/natural death (limited exclusions) </li></ul><ul><li>Convenient eligibility conditions </li></ul><ul><li>Additional Optional riders </li></ul><ul><li>PROVIDED BY LIFE INSURANCE COMPANIES </li></ul>Life Insurance – Trends <ul><li>Monopoly of one single company so far </li></ul><ul><li>Increasing popularity amongst employers/ employees </li></ul><ul><li>General cover is about 3 to 5 times the gross annual salary </li></ul><ul><li>Companies with huge staff strength opt for profit-sharing </li></ul>
  9. 12. Leave Encashment –Defined benefit <ul><li>For whom? </li></ul><ul><ul><li>If company offers encashment of leave, all employees </li></ul></ul><ul><li>What benefit? </li></ul><ul><ul><li>Will be based on the company policy. </li></ul></ul><ul><ul><li>Normally x days salary for each accumulated day of leave </li></ul></ul><ul><li>How Funded? </li></ul><ul><ul><li>Institute of Chartered Accountants of India require that a provision be made for the liability. </li></ul></ul><ul><ul><li>No special tax benefits for self-funding through a trust </li></ul></ul><ul><ul><li>Insurance plans available to manage the funds </li></ul></ul>
  10. 13. Gratuity – Defined Benefit <ul><li>For whom? </li></ul><ul><ul><li>Engaged in Factories, Mines, Plantations, Railways, Shops and establishments notified by Government </li></ul></ul><ul><ul><li>In service for 5 successive years </li></ul></ul><ul><li>What benefit? </li></ul><ul><ul><li>15 days wages for each year of service </li></ul></ul><ul><ul><li>Maximum limit Rs 3,50,000/ </li></ul></ul><ul><ul><li>7 days wages per season for seasonal occupation </li></ul></ul><ul><li>How Funded? </li></ul><ul><ul><li>Can be funded our unfunded. </li></ul></ul><ul><ul><li>Special tax concessions if funded through a trust or insurance company </li></ul></ul>
  11. 14. Superannuation – Defined Contribution/ benefit <ul><li>For whom? </li></ul><ul><ul><li>Non-mandatory, defined by company policy </li></ul></ul><ul><li>What benefit? </li></ul><ul><ul><li>Can be defined benefit(certain formula of last drawn salary) /defined contribution(certain %age of salary every month contributed to a fund) </li></ul></ul><ul><ul><li>Can be different for different grades </li></ul></ul><ul><li>How Funded? </li></ul><ul><ul><li>Can be funded our unfunded. </li></ul></ul><ul><ul><li>Special tax concessions if funded through a trust or insurance company </li></ul></ul>
  12. 15. Retirement Benefits - Trends <ul><li>Only one life insurance company in the market till 2000 </li></ul><ul><li>Offered a cash-accumulation conventional scheme </li></ul><ul><li>More and more companies now funding through Insurance </li></ul><ul><li>Unit-linked – a preferred platform </li></ul><ul><li>Pensions benefits - from Defined Benefit to defined contribution </li></ul>
  13. 16. HDFC STANDARD LIFE INSURANCE HDFC SL is Insurope’s network partner in India
  14. 17. Employee Benefits – Insurance Co’s viewpoint Employee Benefits Insurance Retirement Defined Contribution Defined Benefit Life Accident Mediclaim Leave Encashment Gratuity Superannuation
  15. 18. Employee Benefits – Insurance Co’s viewpoint Employee Benefits Insurance Retirement Defined Contribution Defined Benefit Life Accident Mediclaim Leave Encashment Gratuity Superannuation
  16. 19. Contact Details <ul><li>Sanjeev Kapur </li></ul><ul><li>Head - Group Sales </li></ul><ul><ul><ul><li>(+91) 98203 48755 </li></ul></ul></ul><ul><ul><ul><li>[email_address] </li></ul></ul></ul><ul><ul><li>Vijay Vaidyanathan </li></ul></ul><ul><ul><li>Manager – Group Sales </li></ul></ul><ul><ul><ul><ul><li>(+91) 98206 11998 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>vijayv @hdfcinsurance.com </li></ul></ul></ul></ul>

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