In this Asinta report, multinational employers can find insights to begin benchmarking employee benefits in India for 2022. Prudent, Asinta’s employee benefits consulting Partner in India, presents the information in a manner that is concise and easy to understand.
Changes to the report for 2022 include:
- The addition of employee income protection (short-term disability) coverage, an employee benefit that was once difficult to come by in the country. (p.15)
- Details on how to set up employee income protection coverage. (p. 16)
An example of what’s inside the report
National Pension Scheme
The Pension Fund Regulatory and Development Authority introduced a corporate model of the National Pension System (NPS), allowing voluntary contributions to a portable pension fund with market-linked returns. As incomes have risen, awareness of the need to supplement the EPF and attractive tax treatment for contributions to the NPS has led to rising participation in the NPS.
Setting up an employer Tier 1 account to enable contributions to the NPS does not require the formation of a trust with trust deed and rules, or a minimum employee number, or even employer contribution. Administration expenses are nominal, making it a more compelling proposition for employers to sponsor this voluntary pension plan.
Employees can easily port from one employer to another through a unique Permanent Retirement Account Number (PRAN). The tax treatment is exempt-exempt-exempt on contribution, returns, and 60% of withdrawal, making this a more attractive pension savings vehicle. Further, employees can contribute an additional INR 50,000 to the Tier 1 account and avail themselves of an additional tax deduction. Employees can also establish a Tier 2 account for additional contributions, although these are not tax-exempt. If a new employer does not have an NPS account, the employee can continue to make contributions.