Cos Find a New Tool to Make Staff Richer
Opt for NPS to get extra tax benefit for workers
Top Indian companies and banks have found a smart way of putting more money in employees pockets without loosening their purse strings at a time the economy is witnessing a slowdown.Some of Indias biggest companies are giving employees a choice to buy products offered under the New Pension System (NPS) to help them get higher tax breaks while building a bigger retirement nest. These include Reliance Industries, Reliance ADA Group, ICICI, State Bank of India, Wipro, Cognizant, ACC, Capgemini, Grasim Industries, Nalco and Konkan Railway Corporation, according to Yogesh Aggarwal, chairman of the Pension Fund Regulatory and Development Authority of India (PFRDA). NPS, a defined benefit scheme, is mandatory for government employees who joined service from January 1,2004, and voluntary for others.A customised version of the scheme was launched for corporates in late 2011, but the initial response was tepid. Even now, most companies park the retirement savings of their employees with the Employees Provident Fund Organisation. However, EPFO is mandatory only for those who earn up to.6,500 a month; beyond this it is voluntary. So, companies are now giving an option to their employees to opt for NPS. An easy way for employers is to restructure salary packages of their employees without incurring any extra cost. Companies will save on expenses on self-administration of pension functions such as setting up a trust, record keeping and fund management and so on, says Aggarwal.
Economic Times, New Delhi, 04-02-2013