Alin
1

Hello all, Can somebady help me with the difference between Superannuation and Gratuity? Thanks Alin
From India, Madras
joshi anita
hi

alin according to my knowleage this is the difference between superannuation and gratuity

Superannuation

Pension

Superannuation in Australia

Retirement

Obsolescence

A pension is a steady income given to a person (usually after retirement). Pensions are typically payments made in the form of a guaranteed annuity to a retired or disabled employee. Some retirement plan (or superannuation) designs accumulate a cash balance (through a variety of mechanisms) that a retiree can draw upon at retirement, rather than promising annuity payments. These are often also called pensions. In either case, a pension created by an employer for the benefit of an employee is commonly referred to as an occupational or employer pension. Labor unions, the government, or other organizations may also fund pensions.

Occupational pensions are a form of deferred compensation, usually advantageous to employee and employer for tax reasons. Many pensions also contain an insurance aspect, since they often will pay benefits to survivors or disabled beneficiaries, while annuity income insures against the risk of longevity.

While other vehicles (certain lottery payouts, for example, or an annuity) may provide a similar stream of payments, the common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal and/or contractual terms.

gratuity

n 1: a relatively small amount of money given for services

rendered (as by a waiter) [syn: tip, pourboire, baksheesh,

bakshish, bakshis, backsheesh]

2: an award (as for meritorious service) given without claim or

obligation

From India, Pune
Gunjan_Sharma
5

Superannuation is 15% of basic and gratuity is 4.81% of the basic.
Superannuation can be optional (you can opt in you on hand salary as a special allowance which will be taxable) while gratuity is not.
Superannuation can be claimed whenever you leave the company while Gratuity can only be claimed if you have completed 5 yrs.
Gunjan

From India, Vadodara
Rajpal
7

Hi,

Both terms have different meaning and used diferently and therefore should not be confused with each other .

In India , Superannuation is a perquisite extended to employees in various companies as a part of employment conditions generally to the management staff more for retention purpose . It had more significance some years ago as it entailed retiral benefit on attaining age of superannuation - say 58 years as companies in private sectors do not have pension schemes unlike Govenment Sector companies .

The superannuation started getting significance as many multinational companies offered this perquisite which even allows deduction up to 15 % of basic and in combination with PF should not go beyond 27 % as per existing rules under the Income Tax provisions .

The superannuation can be prescribed through LIC or many other private insurance cos. and no. of options may be chosen from the scheme by employees who are members at the time of leaving the company .

Whereas Gratuity is compulsary under the provisions of The payment of Gratuity Act after an employee completes 5 years service with the company . Gratuity becomes payable only on completion of 5 years only .

Hope , these inputs shall be of some help and give clarity.

Regards,

Rajpal

From India, Mumbai
meet_gaurava
7

As Per the Indian Accounting Standard 15 or AS 15 (Rev.)
1. Superannuation is a defined contribution plan
2. Gratuity is a defined benefit plan
1. Superannuation is employee's contribution
2. Gratuity is employer's contribution
1. Employee can withdraw 1/3 or Superannuation Fund as tax free income and with rest pf 2/3 he has to buy an annuity plan (pension plan).
2. 100% of the Gratuity amount is Income Tax Free and can be received in one go.
1. Superannuation is not a statute
2. Gratuity is statute
1. Superannuation can be withdrawn any time ( leaving the company or retiring)
2. Gratuity can be received only when you complete 5 years of continious service.
Cheers!!!

From India, Hyderabad
deepak_dwivedi9
149

Dear Rajpal,
We do really appreciate such answers as you have given the CORRECT answer for this specific post and would also request to the members to enrich the knowledge before answering the questions as it my confuse the Questioner.

From China
tkktokala
Dear Deepak i just seen your post after six months can you elabrate the proverb /the cotation which you used because it is quite interesting to know in depth
From India, Hyderabad
ganeshkumarg1980
Dear All, Good Morning! May I have the eligibility criteria & computing method of Superannuation in India? - Can somebody help me on this? Thanks Kumar G
From India, Madras
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.





Contact Us Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2024 CiteHR ®

All Copyright And Trademarks in Posts Held By Respective Owners.