| Insurance >> Group Schemes >> Group Level Encashment Schemes |
| The present liability of Employees' Leave Encashment, which is otherwise being provided in your Balance Sheet, can be funded under a Group Leave Encashment Scheme with the Corporation. This arrangement will be under a POOLED FUND and shall attract the same accumulation advantage which is being offered to Group Gratuity Scheme being managed by the Corporation under its Corporate Fund Management Programme. This will offer you the following advantages : |
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- Hassle free administration
- Better Accumulation Rate since both Gratuity and Leave Encashment Funds will be clubbed to determine the accumulation rate from time to time
- Flexibility of settlement of Leave Encashment dues from time to time i.e. intermittent Encashment of leave allowed to employees and Terminal Leave Encashment dues payable
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| Considerable Reduction in Administration work |
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| We take over the day to day administration of the scheme, with No Administration Cost. |
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| Free Actuarial Valuation |
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| Actuarial Valuation services will be provided free of cost. You need not obtain private actuary's report, once the fund is taken over by LIC. These services will be applicable to both Gratuity as well as Leave Encashment Policies. |
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| Attractive Yield |
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| We provide attractive rate of interest on the fund. Fund starts attracting interest from the date of deposit. For the year 2007-2008 , the interest rates ranged from 9.00 % to 9.55%. |
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| No Servicing Costs |
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| There is no deduction of servicing costs either from the interest declared or from the Fund. Your Organisation can save the fund management costs. |
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| Life Cover Benefit |
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An Insurance Cover - of your choice, can be offered along with the funding of Leave Encashment liability under the Scheme
The cover can be customized suiting your needs - with minimum cover being Rs. 10,000/- per employee.& maximum 1,00,000. Any higher cover, if you so desire, can also be provided once we get to know about your decision in this respect |
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| Steps involved in Transfer of Funds |
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- Rules of the scheme to be signed by the authorized official
- Duly completed set of Master Proposal Form No. 6200/01/03 to be signed by authorized official of your Company and to be handed over to the Corporation
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| Liquidity |
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| Life Insurance Corporation of India (LIC) is a Financial Power House and can ensure 100% Liquidity of the funds invested since there is huge pool of funds being invested by the Corporation under its Funds' Management Programme (as at 31.06.2008 funds under management : Rs. 41,000 Crores (approx) and the same gets swelled by almost Rs. 7,000 Crores each year) and thereby Liquidity of the Funds under Management can easily be ensured in case of huge withdrawals at a particular time. |
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| Security |
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| The most important aspect, above all, is Security of the Funds Invested since these are Employee Welfare Funds. Funds invested with the Corporation (LIC) enjoy Soverign Guarantee (Central Government of India) and the same is expressly provided under Section 37 of the LIC of India Act, 1956. |
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| Method of Calculation & Settlement / Administration Procedure |
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| The Calculation of Benefits - both Gratuity & Leave Encashment - will be as per the Rules of the Scheme framed by your Company from time to time. In short, it will be tailored to suit your requirements. |
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| Statements / Certificates to be issued under the schemes |
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| The Fund Manager (LIC of India) will be issuing following Statements / Certificates to facilitate smooth functioning of the Schemes as well as providing relevant information to the Trustees / Employer. |
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- Year End Fund Statement to be issued every year after the books are closed. Generally this Statement is issued by First week of April, every year, giving complete details of the movement of the Fund - viz. Opening Balance, Receipts, Settlements, Interest Credited & Closing Balance - under each Scheme
- AS - 15 Certification for each Scheme, as per the provisions of Accounting Standard 15 - given for the purpose of audit to check up the adequacy / solvency of the Fund
- Actuarial Valuation Report - for each Scheme based on the Data received from the employer / trustees. This statement is given generally at the time of Renewal of the Scheme, however, special favour can be extended to accommodate actuarial valuation for making specific provisions of liability(ies) at the year end. This facility is extended free of cost
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| Claim Settlement |
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The procedure will be identical to that of Gratuity Settlement and your Company will have an option to either claim the monies in advance (you prefer the claim earlier and we make the payment a day or two in advance for releasing the same at your end on the terminal date etc.) OR your Company can seek reimbursement on the strength of settlement carried out at your end.
Especially for GLES, where intermittent payments are also permitted, you can keep on seeking reimbursement for disbursals made by you every month.
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| Client Profile under GLES |
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| Following clients - both Public & Private sector put together, have funded their Leave Encashment liabilities with the Corporation |
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| Name of the Client |
Approximate value of funding as at 31.03.2008 |
| Indian Oil Corporation |
Rs. 358 Crores |
| UTI AMC Limited |
Rs. 9 Crores |
| Jawaharlal Nehru Port Trust |
Rs. 6 Crores |
| Orissa Sponge Iron |
Rs. 5 Crores |
| Infosys Limited |
Rs. 45 Crores |
| Dabur Limited |
Rs. 4 Crores |
| Indo Count Industries |
Rs. 1 Crore etc. just to name a few |
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