This is my first post for the group. I have served my last organisation for 23 years and now opted for VRS. The supeannuation fund accumulated in my account a little over 3 lac.
Now as per employer there are two choices. First withdraw this money after deduction of 33% tax. Second opt for Retirement Pension, which will be calculated on this amount.
Can anybody help me in to know the rules in deciding the pension amount. what are the other details on this pension - till what age I will be getting this pension and will after my death also my family will get it? Ultimately which is the beneficial option to choose?
From India, Mumbai
Now as per employer there are two choices. First withdraw this money after deduction of 33% tax. Second opt for Retirement Pension, which will be calculated on this amount.
Can anybody help me in to know the rules in deciding the pension amount. what are the other details on this pension - till what age I will be getting this pension and will after my death also my family will get it? Ultimately which is the beneficial option to choose?
From India, Mumbai
Your posting does not give any idea as to whether you served in Public sector or private company. In any case, you will be entitled for Provident Fund pension. Whether superannuation pension offered by your establishment is the same PF Pension or any thing else?
If you opt for pension, you will get it till death and applicability of pension to family will have to be decided only by referring to the provisions of your pension scheme. If you have provident fund pension, your family will be getting it.
Please ensure that you have provident fund pension and if you have it, then I suggest to avail withdrawal of your superannuation fund in full.
Regards,
Madhu.T.K
From India, Kannur
4246If you opt for pension, you will get it till death and applicability of pension to family will have to be decided only by referring to the provisions of your pension scheme. If you have provident fund pension, your family will be getting it.
Please ensure that you have provident fund pension and if you have it, then I suggest to avail withdrawal of your superannuation fund in full.
Regards,
Madhu.T.K
From India, Kannur
Thanks for the reply. I have worked for Xerox India Ltd., This pension which i was mentioning is the only pension which we can avail. The PF fund is accumulated in a trust which is handled by company itself and there is a option that insted of tranferring to the next employer, PF amount can be paid at the time of VRS/ leaving the company to the employee. That is y I am planning to get the PF amount and use the superannuation fund in opting for pension. Is it the right choice?
From India, Mumbai
From India, Mumbai
Dear Mr. Saxena,
You can opt for either or both. However, if your superannuation is something like the LIC Group Superannuation Policy/Scheme, it may be safer to opt for one. Legally, it may not be ideal to draw pension from two different schemes, both being governed under different Government authorities.
Coverage will be till death. More commonly, the pension is payable on the life of the beneficiary. Family coverage is based on the policy guidelines/rules/deed of variation since Companies are known to tweak clauses of the standard template within permissible limits.
The corpus is utilized towards the payment of pension of the type the beneficiary may opt and the benefit so received is tax free. A lump sum payable by way of death besides the pension, if the employer has taken Group Insurance Scheme in conjunction with the Group Superannuation Scheme.
On retirement, a member may opt for a pension from the normal retirement date. He may opt for payment of commuted value and pension, immediately in which case the benefits would be taxable.
In Superannuation Fund, on retirement, in most schemes, the corpus (contributions plus interest of a member) is most commonly utilized to provide the following:-
You could check these facts from your office. If they could assist, the HR/Finance deptt could help you in calculating the yield of both in terms of commutable corpus and commensurate yield of both. You could then decide.
Regards,
Rahul Kumar
From India, New Delhi
You can opt for either or both. However, if your superannuation is something like the LIC Group Superannuation Policy/Scheme, it may be safer to opt for one. Legally, it may not be ideal to draw pension from two different schemes, both being governed under different Government authorities.
Coverage will be till death. More commonly, the pension is payable on the life of the beneficiary. Family coverage is based on the policy guidelines/rules/deed of variation since Companies are known to tweak clauses of the standard template within permissible limits.
The corpus is utilized towards the payment of pension of the type the beneficiary may opt and the benefit so received is tax free. A lump sum payable by way of death besides the pension, if the employer has taken Group Insurance Scheme in conjunction with the Group Superannuation Scheme.
On retirement, a member may opt for a pension from the normal retirement date. He may opt for payment of commuted value and pension, immediately in which case the benefits would be taxable.
In Superannuation Fund, on retirement, in most schemes, the corpus (contributions plus interest of a member) is most commonly utilized to provide the following:-
- Commuted Value (Equivalent to 1/3rd of the corpus) which is tax free.
- The corpus that remains after providing for the commuted value is taken as the purchased price to provide for pension.
- Employer's contribution is exempt from tax
- Employee's contribution qualifies for deduction under section 88 (para111) or deduction under section 80C.
- Interest on the accumulated balance is exempt from tax.
- Section 10(13) grants exemption in respect of payment from the fund : (a). To legal heirs on the death of the beneficiary (e.g payment to widow of the beneficiary), or, (b). To an employee in lieu of or in commutation of an annuity on his retirement at or after the specified age or on his becoming incapacitated prior to such retirement, or, (c). by way or refund of contribution on the death of the beneficiary, or, (d). by way of refund of contribution to an employee on his leaving otherwise than in the circumstances mentioned in (b) to th extent to which payment does not exceed the contribution made prior to April 1, 1092. (for instance, where the amount received by an employee does not include any contribution made prior to April 1, 1062, the whole amount is taxable).
You could check these facts from your office. If they could assist, the HR/Finance deptt could help you in calculating the yield of both in terms of commutable corpus and commensurate yield of both. You could then decide.
Regards,
Rahul Kumar
From India, New Delhi
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