Only 20% Firms Offer Retirement Plans In India...!
A
study of about 130 domestic & multinational companies has revealed that
only one-fifth of Indian employers offer retirement pension schemes to their
employees.
According
to a study by Vantage Health & Benefits Consulting Pvt Ltd, only 19% of the
companies offer defined contribution superannuation schemes to their employees.
Superannuation
schemes mainly consist of pension schemes offered by the National Pension
Scheme (NPS) and group gratuity schemes offered by insurance companies.
Mr.
Sudip Mukhopadhyay, Managing Partner, Vantage Consulting said, “In a country
with no social security schemes, it is a matter of concern that majority of the
companies have kept themselves confined to statutory requirements for
retirement benefits.”
The
survey says a 30 year-old married person, intending to work till 65, will need
to save 30% of his/her annual pre-tax salary every year to ensure that he has
funds that will last till he is 90.
He
said that after the introduction of the fringe benefit tax, whereby companies
are taxed on the retirement plans, most companies withdrew the schemes.
The
poor distribution network of the NPS has deterred the popularity of these
schemes, said Mr. Arvind Laddha, CEO and Founder of Vantage Group.
He
added that lack of group gratuity plans by private life insurance firms, due to
the regulatory requirement of providing a non-zero rate of return on pension
products is also a deterrent.
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