Group Gratuity Scheme:
The Payment of Gratuity Act 1972 makes it compulsory for employers, who have 10 or more employees, to set up a Gratuity Scheme. The Group Gratuity Scheme operates as follows:
• Employer sets up Gratuity fund as an irrevocable trust fund
• Trustees enter into a contract with an insurance company to manage funds
• Insurance company manages fund by diversifying risk.
The Main Benefit is to the families of employees who die at an early age since the gratuity is paid on the basis of completed service.
Group Insurance provides cover for a group of people who satisfy the following conditions :
• The group must be formed for reasons other than to take a policy
• Members enter and exit a group for reasons other than to take a policy
• Should consist of more than 25 members
The Master policy covers all group members and there is no mandatory requirement for all members have to apply for equal cover. Al inception of the policy, all members have an option to join, but members who join later cannot be covered immediately. Members appointed specified authority to represent the group and premiums vary depending on performance of the group. The surplus if any may be shared among members in case of good performance (PROFIT SHARING SYSTEM).
The Payment of Gratuity Act 1972 makes it compulsory for employers, who have 10 or more employees, to set up a Gratuity Scheme. The Group Gratuity Scheme operates as follows:
• Employer sets up Gratuity fund as an irrevocable trust fund
• Trustees enter into a contract with an insurance company to manage funds
• Insurance company manages fund by diversifying risk.
The Main Benefit is to the families of employees who die at an early age since the gratuity is paid on the basis of completed service.
Group Insurance provides cover for a group of people who satisfy the following conditions :
• The group must be formed for reasons other than to take a policy
• Members enter and exit a group for reasons other than to take a policy
• Should consist of more than 25 members
The Master policy covers all group members and there is no mandatory requirement for all members have to apply for equal cover. Al inception of the policy, all members have an option to join, but members who join later cannot be covered immediately. Members appointed specified authority to represent the group and premiums vary depending on performance of the group. The surplus if any may be shared among members in case of good performance (PROFIT SHARING SYSTEM).
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