EMPLOYEE BENEFITS IN INDIA

1
EMPLOYEE BENEFITS IN INDIA
- the emerging trends
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
(No Transcript)
5
(No Transcript)
6
(No Transcript)
7
Overview of Employee Benefit Scenario In India
Employee Compensation
Allowances Bonus
Employee Benefits
Salary
8
Overview of Employee Benefit Scenario In India
Employee Benefits
Life Insurance
Leave Encashment
Provident Fund
Gratuity
Super-annuation
Mediclaim
Personal Accident
9
Employee Benefits Insurance Cos viewpoint
Employee Benefits
Insurance
Retirement
Life
Accident
Mediclaim
Leave Encashment
Superannuation
Gratuity
Defined Contribution
Defined Benefit
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 Insuropes network partner in India

17
Employee Benefits Insurance Cos viewpoint
Employee Benefits
Insurance
Retirement
Life
Accident
Mediclaim
Leave Encashment
Superannuation
Gratuity
Defined Contribution
Defined Benefit
18
Employee Benefits Insurance Cos viewpoint
Employee Benefits
Insurance
Retirement
Life
Accident
Mediclaim
Leave Encashment
Superannuation
Gratuity
Defined Contribution
Defined Benefit
19
Contact Details

• Sanjeev Kapur
• Head - Group Sales
• (91) 98203 48755
• Sanjeevk_at_hdfcinsurance.com

• Vijay Vaidyanathan
• Manager Group Sales
• (91) 98206 11998
• vijayv_at_hdfcinsurance.com