Guidelines for pvt employees post-retirement benefits by Sept:ICAI
New Delhi, Aug 8 (UNI) Guidelines for post-retirement benefits for employees of large and medium sized companies would be notified by 15 September, 2006, and would be mandatory on all corporates.
''The Actuaries Society of India (ASI) -- a statutory body for framing post-retirement benefits has almost finalised the post-retirement benefits guidelines in consultation with ICAI, ICAI President T N Manoharan said at a Seminar on 'AS15 and the future of Employee Benefits in India,'' jointly organised by ASSOCHAM and Watson Wyatt Worldwide here today.
The Board of Governors of ASI and a few senior functionaries in the ICAI, will be meeting in Mumbai this month-end to finalise the comprehensive guidelines for ensuring post-retirement benefits for employees of large private sector for their notification in the first half of September.
He, however, clarified that the small and tiny sector would not fall under the mandate of the said guidelines because of strategic reasons, but these would be mandatory for the management of large and medium sized corporates to abide by them.
Mr Manoharan further stated that large and medium sized corporates would have to extend post-retirement benefits for the employees as prescribed by ASI guidelines, to ensure them to plan their retirement schemes more precisely.
The guidelines would be compatible in the liberalised economy as per revised accounting standards 15.
Meanwhile, Mr Manoharan and Watson Wyatt Worldwide Asia Pacific head Bob Charles jointly released a survey on 'Employee Retirement Benefits and Healthcare: Ageing Asia Work Force 2006', which highlights that some governments and many employers will face major cost upheavals, as more than 70 per cent of employees now expect their employers to fully fund their healthcare and retirement costs.
Such issues will have a major financial impact on corporations' bottom lines over the next two decades because the ability of Governments to pick up more social welfare cost is very limited.
Mr Charles said that in India, 53 per cent of employers identified 'Ageing Population' as the most significant demographic change for India over the next 15-20 years. More than half interviewed cited serious concerns for the sustainability of the statutory healthcare and retirement benefits system, implying that employers will ultimately have to pay more.
As global competition intensifies and India gradually moves away from being a provider of business process outsourcing and IT services to being a provider of new value-added services and products, the demand for workers with specialised skill sets will increase.
Indeed, companies in India can enhance their competitiveness by attracting and retaining the most qualified employees with a comprehensive retirement and healthcare benefits scheme.
In fact, research by Watson Wyatt shows that offering a comprehensive supplementary retirement and healthcare benefits scheme can be a strong incentive for employees, whilst taking into account cost considerations.
In addition, companies have at their disposal, a number of strategies to address the healthcare and retirement needs brought about by an ageing workforce.
The survey results by Watson Wyatt show that setting up supplementary benefits plans for employees and, increasing company statutory contributions are the top two actions companies prefer to take to address the increased retirement and healthcare benefit needs, brought about by an ageing population.
UNI RA CS RN1954