Population in excess of 1 Billion 35 States and Union Territories 24 Languages 7 Religions 3000 communities

INDIA Diversity in language, culture and religion Does this diversity extend to employee benefits? Yes & No

Overview of Employee Benefit Scenario In India Employee Compensation Employee Compensation Employee Compensation Employee CompensationSalarySalary Allowances & Bonus Allowances Employee Benefits

Overview of Employee Benefit Scenario In India Employee Benefits Employee Benefits Employee Benefits Employee Benefits MandatoryMandatory VoluntaryVoluntary Provident Fund GratuityGratuity Personal Accident MediclaimMediclaim Leave Encashment Life Insurance Super- annuation

Employee Benefits – Insurance Co’s viewpoint Employee Benefits Employee Benefits Employee Benefits Employee BenefitsInsuranceInsuranceRetirementRetirement Defined Contribution Defined Benefit LifeLifeAccidentAccidentMediclaimMediclaim Leave Encashment GratuityGratuity SuperannuationSuperannuation

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

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

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

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

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

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

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Employee Benefits – Insurance Co’s viewpoint Employee Benefits Employee Benefits Employee Benefits Employee BenefitsInsuranceInsuranceRetirementRetirement Defined Contribution Defined Benefit LifeLifeAccidentAccidentMediclaimMediclaim Leave Encashment GratuityGratuity SuperannuationSuperannuation

Employee Benefits – Insurance Co’s viewpoint Employee Benefits Employee Benefits Employee Benefits Employee BenefitsInsuranceInsuranceRetirementRetirement Defined Contribution Defined Benefit LifeLifeAccidentAccidentMediclaimMediclaim Leave Encashment GratuityGratuity SuperannuationSuperannuation

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