Types of fringe benefits

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Types of fringe benefits

  1. 1. Types of Fringe Benefits 1 Old Age & Retirement Benefits By:Shobhit Shukla (2012MB50) Shailendra Singh Rajput (2012MB56) Shubham Dev Verma (2012MB47) Shubham Kumar (2012MB27)
  2. 2. Table of Contents • Old age and retirement benefits • Provident fund • Pension • Deposit linked insurance • Medical benefits • Gratuity • References 2
  3. 3. Old age and retirement benefits • Provident fund • Pension • Deposit linked insurance • Medical benefits • Gratuity 3
  4. 4. Provident Fund • Provident Fund is one of the main platforms of savings in India for nearly all working people. • Meant for Economic Welfare of the employees • Comes under Employee’s Provident Fund Act, 1952. • The Employees Provident Fund Organisation (EPFO), is a statutory body of the Indian Government that administers Provident Fund. 4
  5. 5. EPF Act • Employees in all factories under Factories Act, 1948 are covered. • Employees on attaining 15 years of membership are eligible for Provident Fund. • Organisations pay the PF amount with interest to employee or his dependants. 5
  6. 6. Deposit & Withdrawal • PF is taken as 12% of the basic wages, dearness allowance and retaining allowance, payable to employees per month. • The rate is fixed at 10% in the case of any sick industrial company • A member can withdraw up to 90% of the amount of provident fund after attaining the age of 54 years of age 6
  7. 7. Employee Provident Fund Benefits EPF scheme benefits employees in following essential needs: • Retirement • Medical Care • Housing • Family obligation • Education of Children 7
  8. 8. Pension • The GOI introduced a scheme of Employees Pension Scheme for the purpose of providing Family Pension and Life Insurance benefits to the employees of various establishments to which the Act is applicable. • The Act was amended in 1971 when Family Pension fund was introduced in the Act. • Both the employer and the employee contribution to this fund. • Contribution to this fund are from the employee contribution to the provident fund to the tune of 1.1/3% of employee wage 8
  9. 9. Employee’s Family Pension Scheme, 1971, Provides for a Family Pension to the family of deceased employee as per the following rates: 9
  10. 10. Contd. • This scheme also provides for the payment of a lump sum amount of Rs 4000 to an employee on his retirement as retirement benefit and a lump sum amount of Rs 2000 in the event of death of an employee as life insurance benefits. 10
  11. 11. DEPOSIT LINKED INSURANCE • Employee deposit linked insurance scheme was introduced in 1976 under the P.F Act, 1952. • Under this, if a member of the Employees Provident fund dies while in service, his dependents will be paid an additional amount equal to average balance during the last 3 yrs in his account. • Amount should not be less than Rs 1000, and maximum amount of benefits is Rs 10,000. • The minimum amount to be maintained is revised by Department of Pension and Pensioners’ Welfare in 2009. 11
  12. 12. DEPOSIT LINKED INSURANCE Sr no. 1. 2. 3. 4. GRADE PAY Minimum Balance to be maintained Pay Band - 2 (Rs 9300-34.800) and above and drawing Rs 25,000 GP of Rs 4800 p.m or more Pay Band -2 (Rs 9300-34800) and drawing GP of Rs 4200 Rs 15,000 p.m or more but less than Rs 4,800 Pay Band-2, Pay Band - 1 (Rs 4440-7440) and drawing Rs 10,000 GP of Rs 1400 p.m or more but less than Rs 4,200 Pay Band - 1S (Rs 4440-7440) and drawing GP of rs 1300 Rs 6,000 p.m but less than Rs 1,400 Additional amount payable shall not exceed Rs 60,000/- 12
  13. 13. MEDICAL BENEFITS • Medical Benefits are provided to retired employees and their family members. • Organizations pay medical expenses through appropriate insurance policy. • These benefits creates a feeling of permanent attachment with organization, to the employees even when they are no longer in service. 13
  14. 14. Gratuity • Benefit payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, — a) on his superannuation, or b) on his retirement or resignation, or c) on his death or disablement due to accident or disease 14
  15. 15. Contd. • The gratuity is covered under the Payment of Gratuity Act, 1972. • This act provides for compulsory payment by management of Factories , plantations, mines, Oil fields , Railways, Shops and other establishments employing 10 or more employees. 15
  16. 16. Payment of gratuity • Payable at the rate of 15 days wages • For each year of completed service • On part thereof in excess of six months • Maximum limit 10 lakhs 16
  17. 17. REFRENCES • http://postalstaffcorner.blogspot.in/2009/08/deposit-linked-insurancescheme-in-gpf.html • http://www.citehr.com/148249-types-fringe-benefits-provident-fund.html • Human resource management – V.S.P Rao 17
  18. 18. Thank you  18

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