The superannuation fund benefit is provided by the employer to their employees. This is a retirement benefit which is made part of employee CTC. While EPF is well known to most of the employees, superannuation benefit is less known about how it operates and how one can withdraw during resignation or retirement. What is Superannuation Fund in India? What are frequently asked questions (FAQs) on Superannuation Fund Benefit that employees should be aware?
Superannuation Fund Benefit – Frequently Asked Questions (FAQs)
Here are some of the frequently asked questions. If you are an employee and Superannuation Fund benefit is part of your CTC, you should go through them.
1) What is Superannuation Fund?
Superannuation fund is a retirement benefit provided by the employer to the employee. The employer would make contributions to the superannuation fund scheme either monthly or yearly. Generally, employers would take the group superannuation scheme and such scheme is offered by most of the insurance companies in India.
2) How would I know whether I am eligible for Superannuation benefit?
Employees can check their CTC break-up. Under retiral benefits, if you see superannuation along with some allocated amount, then you are eligible and would be getting superannuation contribution to your account.
3) Do we have a Superannuation account number like the EPF UAN number?
Companies would take the group superannuation scheme from insurance companies. These companies would allot a policy number to employees. You can reach your company payroll department to know more about this policy number.
4) Where can I check my superannuation fund balance?
You need to know the insurance company who is offering such group superannuation scheme + Policy number to know the balance. You can get these details from your company payroll division. Once you have it, you can mail the insurance company for login and password details from your official mail ID. Once you get login details, you can login to insurance company porta and check your superannuation fund balance. This amount is all accumulated amounts + interest / returns from such schemes.
5) What are various types of Superannuation Benefits?
There are 2 types of super-annuation fund benefits:
A) Defined benefit plans: The benefits to be received at the retirement are already known to the employee and it is fixed on the basis of their rank service and final salary. So, the risk of generating such benefits is entirely on the employer.
B) Defined contribution plans: These schemes are better to manage as the employee and employer directly correlate it with the contributions made. The scheme defines the contribution of both and leaves the outcome to the market forces. Most of the plans existing today are defined contribution plans. Here, the risk factor is attached to the employee, as he is not aware of the amount he is going to receive at the time of retirement.
6) How Superannuation benefit is calculated?
This answer would surprise you. Whatever is there in your superannuation category in the CTC is sometimes NOT invested in your superannuation fund. The superannuation computation is done on the following methodology.
a) Less than 1 year of service – NIL.
b) 1 to 2 years of service – 50% of contribution + interest received from the fund.
c) 2 to 3 years of service – 75% of contribution + interest received from the fund.
d) 3+ years of service-100% of contribution + interest received from the fund.
Means if you work for 1 to 3 years, you would get partial superannuation amounts though such amount is part of your CTC.
7) What happens to Superannuation fund when I resign and move to another company?
When you resign and move to another company, you need to keep track of such superannuation benefits till you either retire or till you take action to move to NPS or withdraw. If employees change jobs frequently, tracking superannuation funds would be a painful process as there could be several such superannuation schemes in employee name.
8) When can I withdraw Superannuation fund in India?
Employees can withdraw / transfer superannuation in below scenarios:
a) In case of death of the employee, either the nominee or family members can withdrawal superannuation fund.
b) Employee can withdraw superannuation in case of resignation and moving to another job.
3) Employee can withdraw after retirement.
4) Employee can transfer superannuation fund Tier-1 NPS on resignation.
9) Can I withdraw 100% Superannuation Fund?
No. There are two options available for employees.
1) Lump sum withdrawal
2) Get annuity pension payment.
These options would depend on whether you are eligible for a gratuity of not. See the next section about it.
10) How to withdraw Superannuation fund in India?
If an employee is NOT eligible for gratuity, they can do lump sum withdrawal up to 50%, otherwise, it they can withdraw only 33% of the superannuation balance.
Balance amount needs to be withdrawn by way of purchasing an annuity option. You can refer more info here at how to withdraw superannuation fund.
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