What is SuperAnnuation and how it benefits more than NPS

POSTED BY MadhuBolli ON October 10, 2010 4:03 am COMMENTS (3)

What is SuperAnnuation and how it benefits more than NPS? I know about NPS but not familiar with superannuation. Our employer has tie up with ICICI to maintain our organization SuperAnnuation fund.

Could anyone throw some light on Supperannuation and also the tax benefits. does it come under EEE exempt ?

3 replies on this article “What is SuperAnnuation and how it benefits more than NPS”

  1. senthilmalin@gmail.com says:

    Hi Manish, I have joined a new employer and has opted for superannuation. I came to know that this is wholly a employer contribution only… but iam seeing many of my peers are afraid to choose it and the few who chosen it were opting out of it.
    My question is if I opt for this superannuation, will my take home salary get reduced? I mean, any amount will be deducted in my CTC? please advise

    1. No , it will not get reduced, its generally part of your CTC.

  2. Superannuation is a retirement Benefit by employer . It is a contribution made by employer each year on your behalf towards the group superannuation policy held by the employer. This is an important part of creating wealth for your retirement .


    b) Normally the Company has a link with agencies like LIC Superannuation Fund, where their contributions are paid.

    c) The Company pays 15% of basic wages as superannuation contribution. There is no contribution from the employee.

    d) This contribution is invested by the Fund in various securities as per investment pattern prescribed.

    e) Interest on contributions is credited to the members account. Normally the rate of interest is equivalent to the PF interest rate. Read what is EPF and PPF ?

    f) On attaining the retirement age, the member is eligible to take 25% of the balance available in his/her account as a tax free benefit.

    g) The balance 75% is put in a annuity fund, and the agency (LIC) will pay the member a monthly/quarterly/periodic annuity returns depending on the option exercised by the member. This payment received regularly is taxable.

    h) In the case of resignation of the employee, the employee has the option to transfer his amount to the new employer. If the new employer does not have a Superannuation scheme, then the employee can withdraw the amount in the account, subject to deduction of tax and approval of IT department, or retain the amount in the Fund, till the superannuation age.

    Note :

    Once the employee completes 3 years of service and works till his/her retirement, he/she can make use of superannuation balance as a form of pension. He/She can withdraw 1/3rd of the accumulated balance after retirement and the rest can be availed as monthly pension till end of life.

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