Page 29 - Insurance Times August 2020

AN INTRODUCTION

TO

SUPERANNUATION

S uperannuation is an option available with an When an employee retires, 25% of balance can be

individual to save so that he/she can generate
withdrawn from the fund. This is tax free. Rest of the
amount is given to the employee in the form of annuity. The
income post retirement from work. SA scheme is
linked with one's employment. Employers have to
once they retire.
contribute a percentage of an employee's salary into the SA benefits are taxed as income in the hands of employees
Superannuation fund. It is also called as "Super".
If an employee resigns, SA fund can be transferred to a new
Prevalence of Superannuation in India employer. If the latter doesn't have a SA fund, then the
employee may withdraw the amount or leave the amount
In India, SA is not compulsory. But it is encouraged for its until he attains the age of SA.
tax benefits. SA scheme is provided to employees who have
completed specified period of service in the company and Importance of Superannuation
belong to a particular category.
a. Increase in number of elderly people
Employer contributes a percent of basic salary to the SA b. Increase in life expectancy ratio
scheme. Contributions from employer are tax deductible. No c. Pressure on Government to take care of elderly is
contributions from employee. Amounts in SA fund are
reduced
invested in securities. Employee gets interest on
investments. d. Enables an individual to live a life of dignity after
retirement
About the author
Insurance with Superannuation
Venkatesh Ganapathy Y SA provides life and disability coverage to members
Presidency Business School (Group Insurance)
Bangalore Y Automatic insurance cover (premium gets deducted
from SA fund)

The Insurance Times, August 2020 29