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Lm ind-employee benefits
- 2. Population in excess of 1 Billion 35 States and Union Territories 24 Languages 7 Religions 3000 communities
- 3. INDIA Diversity in language, culture and religion Does this diversity extend to employee benefits? Yes & No
- 4. Companies providing benefit (%) Analysed items 2004 House Rent Allowance 97 Gratuity 95 Housing Loan 91 Medical reimbursement/ allowance 90 Insurance 89 Leave Travel allowance 87 Hospitalisation 86 Variable Bonus 85 Conveyance allowance 84 Superannuation 61 Car Loan 54 Social/ Sports club membership 51 Incentive/ Sales Commission 44 Hard Furnishing 39 Medical check-up 39 Fixed Bonus 33 Other allowances 26 Flexible benefit plan 16
- 5. Companies providing benefit (%) Analysed items 2004 House Rent Allowance 97 Gratuity 95 Housing Loan 91 Medical reimbursement/ allowance 90 Insurance 89 Leave Travel allowance 87 Hospitalisation 86 Variable Bonus 85 Conveyance allowance 84 Superannuation 61 Car Loan 54 Social/ Sports club membership 51 Incentive/ Sales Commission 44 Hard Furnishing 39 Medical check-up 39 Fixed Bonus 33 Other allowances 26 Flexible benefit plan 16
- 6. Companies providing benefit (%) Analysed items 2004 House Rent Allowance 97 Gratuity 95 Housing Loan 91 Medical reimbursement/ allowance 90 Insurance 89 Leave Travel allowance 87 Hospitalisation 86 Variable Bonus 85 Conveyance allowance 84 Superannuation 61 Car Loan 54 Social/ Sports club membership 51 Incentive/ Sales Commission 44 Hard Furnishing 39 Medical check-up 39 Fixed Bonus 33 Other allowances 26 Flexible benefit plan 16
- 7. Overview of Employee Benefit Scenario In India Employee Compensation Employee Compensation Salary Salary Allowances Allowances Employee Employee & Bonus & Bonus Benefits Benefits
- 8. Overview of Employee Benefit Scenario In India Employee Benefits Employee Benefits Mandatory Mandatory Voluntary Voluntary Life Life Leave Leave Provident Provident Insurance Encashment Gratuity Gratuity Insurance Encashment Fund Fund Mediclaim Super- Super- Personal Personal Mediclaim annuation annuation Accident Accident
- 9. Employee Benefits – Insurance Co’s viewpoint Employee Benefits Employee Benefits Insurance Insurance Retirement Retirement Accident Accident Mediclaim Mediclaim Life Life Leave Leave Superannuation Superannuation Encashment Encashment Gratuity Gratuity Defined Defined Defined Defined Benefit Benefit Contribution Contribution
- 10. Mediclaim Insurance •Reimbursement of medical expenses following hospitalization •Cash less hospitalization facility available under certain plans •Tax deduction available for the business Accident Insurance •Can offer compensation for any/all of the following: •Accidental death, disability •Medical expenses for treatment post accident • List of exclusions BOTH BENEFITS ARE OFFERED BY NON-LIFE INSURANCE COMPANIES
- 11. Life Insurance • Benefit payable on accidental/natural death (limited exclusions) • Convenient eligibility conditions • Additional Optional riders PROVIDED BY LIFE INSURANCE COMPANIES Life Insurance – Trends • Monopoly of one single company so far • Increasing popularity amongst employers/ employees • General cover is about 3 to 5 times the gross annual salary • Companies with huge staff strength opt for profit-sharing
- 12. Leave Encashment –Defined benefit For whom? – If company offers encashment of leave, all employees What benefit? – Will be based on the company policy. – Normally x days salary for each accumulated day of leave How Funded? – Institute of Chartered Accountants of India require that a provision be made for the liability. – No special tax benefits for self-funding through a trust – Insurance plans available to manage the funds
- 13. Gratuity – Defined Benefit For whom? – Engaged in Factories, Mines, Plantations, Railways, Shops and establishments notified by Government – In service for 5 successive years What benefit? – 15 days wages for each year of service – Maximum limit Rs 3,50,000/ – 7 days wages per season for seasonal occupation How Funded? – Can be funded our unfunded. – Special tax concessions if funded through a trust or insurance company
- 14. Superannuation – Defined Contribution/ benefit For whom? – Non-mandatory, defined by company policy What benefit? – Can be defined benefit(certain formula of last drawn salary) /defined contribution(certain %age of salary every month contributed to a fund) – Can be different for different grades How Funded? – Can be funded our unfunded. – Special tax concessions if funded through a trust or insurance company
- 15. Retirement Benefits - Trends • Only one life insurance company in the market till 2000 • Offered a cash-accumulation conventional scheme • More and more companies now funding through Insurance • Unit-linked – a preferred platform • Pensions benefits - from Defined Benefit to defined contribution
- 16. HDFC STANDARD LIFE INSURANCE HDFC SL is Insurope’s network partner in India
- 17. Employee Benefits – Insurance Co’s viewpoint Insurance Insurance Retirement Retirement Accident Accident Mediclaim Mediclaim Life Life Leave Leave Superannuation Superannuation Encashment Encashment Gratuity Gratuity Defined Defined Defined Defined Benefit Benefit Contribution Contribution
- 18. Employee Benefits – Insurance Co’s viewpoint Employee Benefits Employee Benefits Insurance Insurance Retirement Retirement Accident Accident Mediclaim Mediclaim Life Life Leave Leave Superannuation Superannuation Encashment Encashment Gratuity Gratuity Defined Defined Defined Defined Benefit Benefit Contribution Contribution
- 19. Contact Details Sanjeev Kapur Head - Group Sales • (+91) 98203 48755 • Sanjeevk@hdfcinsurance.com Vijay Vaidyanathan Manager – Group Sales • (+91) 98206 11998 • vijayv@hdfcinsurance.com