Many employers are providing Leave Encashment benefit in addition to other retirement benefits to their employees which are a lump sum amount payable to the employees or their dependants on retirement, death, disablement, voluntary retirement etc.
End-of-the-year leave encashment facility and Leave Encashment Facility at Retirement available to employees can be a huge liability to the company. To meet this need of Organisations, LIC has introduced New Group Leave Encashment Scheme. Just pay a yearly premium, fund your leave encashment liability and let LIC take care of your worries.
Nature of liability
The amount depends upon the leave to the credit of the employee and his/ her salary at the time of exit. Liability is of increasing nature as it is linked with salary as well as leave position.
The Features
New Group Leave Encashment Schemes (NGLES) of LIC helps the employers in funding of their lave encashment liability.
The Benefits
On the exit of an employee or availing the Leave Encashment Facility while in service, if the Rules provide for the same, the Leave Encashment amount will be paid from the Fund of the scheme maintained with LIC.
On the death of an employee, in addition to his / her leave encashment benefit, his/her family will be entitled to the amount of Insurance Cover.
The Life Insurance Corporation of India will do the Actuarial Valuation and will provide necessary certificate as per AS-15.
Attractive yield: – As soon as contribution is received by LIC from the employer under the scheme, a Policy Account is opened and fund starts earning interest from day1. There would be no occasion for keeping the funds idle for investments as the fund start earning interest from that very next date of receiving the fund.
The Company would have not to bother about the investment of the funds as that aspect would be taken care of by LIC once the funds are handed over to it.
By handing over the funds to LIC, the administration work would be considerably reduced.
LIFE COVER – AN ADDED ATTRACTION
A unique feature of our Scheme is to provide, in the event of pre-mature unfortunate death, a sum equal to the life cover provided by the Employer subject to minimum of one thousand per Member. The benefit is secured at a low cost through One Year Renewable Term Assurance Plan.
Security:-
The most important aspect above all is SECURITY OF THE FUNDS INVESTED since this is EMPLOYEE WELFARE FUND. Funds invested with the Corporation (LIC) enjoy SOVERIGN GUARANTEE of Central Government of India and the same is expressly provided under Section 37 of the LIC of India Act, 1956, passed by none other than Parliament of India, i.e. 100% security of Funds invested with LIC.