Ours is an Agrochemical MNC which was taken over from RPG and previously Searle pharma. Since a long time we have a ‘Superannuation Scheme’ wherein we contribute 15% of the employees Basic salary, as superannuation contribution to the LIC Trust – who is incharge of the Superannuation scheme of our organization. Employees who retire or resign after a long service are eligible for 1/3rd amount as withdrawal and 2/3rd amount as pension over period of 5 to 10 years.
The problem started since last two years when the company has decided to incorporate this amount as a part of Salary (i.e. the Cost To Company – CTC) in the Salary package of all the employees. All employees who are joining new are demanding that they are not interested in such schemes and they wish the contribution be a part of the monthly gross or CTC. Few existing employees have also requested to stop the ‘Superannuation-deduction’ and adjust the amount in the CTC to enhance their monthly package.
My request for an Advise from you is
Whether I can stop deducting Superannuation Contribution for the existing employees? Is it necessary for us to show new employment of those employees?
If not then can I reduce the Superannuation contribution from 15% to say 5%?
Can I decide not to deduct this amount for all the new recruits henceforth in the organization?
I have been receiving conflicting advises on the same and I shall be greatly obliged to receive a standard guidance from your side.
Regards
Ketan
From India, Mumbai
The problem started since last two years when the company has decided to incorporate this amount as a part of Salary (i.e. the Cost To Company – CTC) in the Salary package of all the employees. All employees who are joining new are demanding that they are not interested in such schemes and they wish the contribution be a part of the monthly gross or CTC. Few existing employees have also requested to stop the ‘Superannuation-deduction’ and adjust the amount in the CTC to enhance their monthly package.
My request for an Advise from you is
Whether I can stop deducting Superannuation Contribution for the existing employees? Is it necessary for us to show new employment of those employees?
If not then can I reduce the Superannuation contribution from 15% to say 5%?
Can I decide not to deduct this amount for all the new recruits henceforth in the organization?
I have been receiving conflicting advises on the same and I shall be greatly obliged to receive a standard guidance from your side.
Regards
Ketan
From India, Mumbai
Question:
Whether I can stop deducting Superannuation Contribution for the existing employees? Is it necessary for us to show new employment of those employees?
If not then can I reduce the Superannuation contribution from 15% to say 5%?
Can I decide not to deduct this amount for all the new recruits henceforth in the organization?
I have been receiving conflicting advises on the same and I shall be greatly obliged to receive a standard guidance from your side.
Reply:
My Opinion - 1) Today's young generation does not believe in saving which is made mandatory by the Company. Their starting salary itself is high and in a matter of few years they draw handsome annual package.
2) Also, the growing economy has evolved many good and variety of investment options to choose from. In such a scenario they should not be restricted with the Superannuation Scheme.
3) If I am not mistaken some company's have superannuation scheme as optional also I know of a company who has discontinued with this practice.
4) If majority feels that superannuation scheme to be stopped, the company should plan the ways to pay the existing employees this amount and lay out a standard policy to be followed in future.
5) The reduction from 15% to 5% will not help, as from employees perspective it is their hard earned money & would not like to part away with even 5% also.
Regards,
Roopa
From India, Mumbai
Whether I can stop deducting Superannuation Contribution for the existing employees? Is it necessary for us to show new employment of those employees?
If not then can I reduce the Superannuation contribution from 15% to say 5%?
Can I decide not to deduct this amount for all the new recruits henceforth in the organization?
I have been receiving conflicting advises on the same and I shall be greatly obliged to receive a standard guidance from your side.
Reply:
My Opinion - 1) Today's young generation does not believe in saving which is made mandatory by the Company. Their starting salary itself is high and in a matter of few years they draw handsome annual package.
2) Also, the growing economy has evolved many good and variety of investment options to choose from. In such a scenario they should not be restricted with the Superannuation Scheme.
3) If I am not mistaken some company's have superannuation scheme as optional also I know of a company who has discontinued with this practice.
4) If majority feels that superannuation scheme to be stopped, the company should plan the ways to pay the existing employees this amount and lay out a standard policy to be followed in future.
5) The reduction from 15% to 5% will not help, as from employees perspective it is their hard earned money & would not like to part away with even 5% also.
Regards,
Roopa
From India, Mumbai
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