Overview of Indian Oil Corporation Limited Employee Benefits Scheme
Indian Oil Corporation Limited provides various employee benefits schemes including the Superannuation Benefit Fund Scheme and Post-Retirement Medical Benefit Facility. The scheme, introduced in 1987, offers benefits to both officers and non-officers. Over the years, it has evolved from a Defined Benefit Scheme to a Defined Contribution Scheme, providing monthly contributions, individual accounts, and a fixed pension upon retirement or separation. The scheme is applicable to all regular employees of Indian Oil, with specific eligibility criteria and contribution details outlined for employee and employer contributions.
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Indian Oil Corporation Limited Employees Superannuation Benefit Fund Scheme & Post Retirement Medical Benefit Facility 19thNovember, 2012 NMDC Conference Hall, Hyderabad By K.J. Kumar, DGM (HR)
Indian Oil Corporation Limited Employees Superannuation Benefit Fund Scheme
Salient features of SBF Scheme A self-contributory Scheme) was introduced in IndianOil in November, 1987 for Officers and Non-Officers. Superannuation Scheme (Defined Benefit Managed through a Trust. Trust exempted under Income Tax Act. Maximum benefit payable is 40% of last drawn salary for 32 years of reckonable service. 13843 beneficiaries are receiving pension under the Defined Benefit Scheme. As envisaged under DPE guidelines, IOCL Employees Superannuation Benefit Fund Scheme has been converted from a Defined Benefit Scheme to Defined Contribution Scheme w.e.f. 01.01.2007.
Salient features of SBF Scheme The modified Scheme has also been approved by Income Tax Authorities. Monthly contributions are made by the employer. Individual accounts are maintained for each employee from 01.01.2007. Return on investment/Interest is credited to individual employees account (as in case of PF). 5595 members are receiving pension under the Defined Contribution Scheme. Pension once fixed remains constant throughout.
IndianOil SBF Scheme APPLICABILITY All regular employees of IndianOil (officers and non-officers). ELIGIBILITY EVENT QUALIFYING SERVICE Retirement on attaining the age of superannuation Separation from service (other than superannuation) Minimum 15 years service . Minimum 15 years service before separation.
IndianOil SBF Scheme CONTRIBUTION Contribution by Employer Employer s contribution in the SBF Scheme would come out of 30% of Basic Pay and DA. 30% constitutes contributions towards Provident Fund, Gratuity Fund, Post-Retirement Medical Benefit Facility and SBF. PF is fixed and others vary from year to year based on Actuarial Valuation. Employer s contribution beyond Rs. 1.0 lakh per annum towards SBF is taxable in the hands of each employee.
IndianOil SBF Scheme BENEFITS On Superannuation Sum of the frozen benefit under Defined Benefit Scheme as on 31.12.2006, if any, and benefit arising out of accumulated contribution w.e.f. 01.01.2007 in the individual account under Defined Contribution Scheme. On separation due to resignation, completing minimum qualifying service of 15 years If the employee joins a PSU/Govt. the accumulated amount in individual account of employee shall be transferred if there is a similar scheme in operation in the establishment of new employer, subject to acceptance. In case the fund cannot be transferred, the employee s individual account shall be kept live but no further contributions shall be permitted. The benefit, as admissible, shall be payable from the notional date of superannuation. after
IndianOil SBF Scheme REFUND OF CONTRIBUTION On resignation, completing qualifying service of 15 years separation due without minimum to Employee s contribution shall be refunded with interest thereon. accumulated direct If the employee joins a PSU/Govt., the accumulated amount account (i.e. Employee s plus Employer s Contribution) w.e.f. 01.01.2007 shall be transferred, if there is a similar scheme in operation subject to acceptance by the Superannuation Benefit Fund of the new employer. in individual
IndianOil SBF Scheme ANNUITY OPTIONS At present annuities are purchased from LIC. 1/3 rd commutation is permissible. Pension Options of LIC : 1. Life time of the member. After death of the member, no benefit shall accrue to his beneficiaries. 2. Life-time of the member with guaranteed benefit for 5 years. 3. Life-time of the member with guaranteed benefit for 10 years. 4. Life-time of the member with guaranteed benefit for 15 years. (Standard option) 5. Life-time of the member with refund of the principal annuity amount to beneficiary at the time of death of the member. 6. Joint life-time of the member as well as his/her spouse. 7. Life-time of the member with guaranteed benefit for 20 years. 8. Joint life and last survivor pension with return of capital Option once exercised remains final and binding.
IndianOil SBF Scheme IT INNOVATIONS TOWARDS BETTER SERVICE TO ANNUITANTS Individual employee-wise cards maintained like PF cards Online SABF portal developed wherein each employee can view their card on real time basis The card captures details like month-wise contributions, interest, pension calculations, etc. The screen shot of the card is like this (Sample report)
Post Retirement Medical Benefit Facility
Post Retirement Medical Benefit Facility (PRMBF) PRMBF Scheme is operating since :- Retired Executives: 01.01.1985 Retired Workmen: 01.11. 1988 The Scheme approved by Board was introduced as a welfare measure to provide medical attendance to retired employees and their eligible dependants in their old age. The Scheme covers:- Retired employees subject to rendering minimum 15 years service; Spouse and Dependant children who are mentally retarded/ spastic/ suffering from incurable congenital diseases. The retiring employees have to deposit one-time contribution at the time of cessation from service for enrolment under the Scheme. The amount ranges from Rs. 4500/- to Rs. 11,000/-
Post Retirement Medical Benefit Facility (PRMBF) Under the DPE guidelines dated 26.11.08 and 02.04.09, the Corporation can allow superannuation benefits upto 30 % of BP + DA which shall include Post-retirement medical benefits besides PF, Gratuity and Pension. In order to regulate the PRMBF within the superannuation benefits ceiling of 30% BP +DA, a Trust Fund in the name of Indian Oil Corporation Limited Employees Post Retirement Medical Benefit Fund has been formed on 28.02.2011. The Trust has been granted due approval by the Income Tax Authorities.
Post Retirement Medical Benefit Facility (PRMBF) The medical claims of retired employees/ dependants are settled by the Corporation on behalf of the Trust and raised to the Trust on a quarterly basis and settled by the Trust accordingly. Based on an actuarial valuation of the PRMB liability, the contribution rate towards post retirement medical facility out of the ceiling of 30 % of BP +DA is assessed on year to year basis and paid to the Trust on a monthly basis. The current valuation is 3.04 % of BP +DA (2011-12). The amount reimbursed towards claims for the F.Y. 2011-12 was Rs.70.39 crore.
Post Retirement Medical Benefit Facility (PRMBF) Annual ceiling for domiciliary treatment for member and beneficiaries varies from Rs.21,000/- to Rs.54,000/-. Annual Hospitalization Ceiling for member and beneficiaries varies from Rs.13,700/- to Rs.75,000/-. Hospitalization ceiling operates in a block of 2 years i.e. carry forward and brought forward. In case of hospitalization in Government/ Corporation nominated hospitals for specified ailments under the Scheme like cancer, tuberculosis, serious cardiovascular/ neurological diseases, the admissible expenses incurred are reimbursed as per actuals. In case of hospitalization in Government/ Corporation nominated hospitals for other than specified ailments, the reimbursement is restricted to 85% of the admissible expenses.
IOCL SBF / PRMBF SCHEME CONCERN As per the modified provisions of the SBF and PRMBF Schemes, an employee has to put in a minimum service of 15 years prior to superannuation to avail benefits under the schemes. There could be certain situations, as illustrated below, wherein depriving the employee of the pension & medical benefits in view of lesser years of service on superannuation, could be highly discouraging and appears unfair as each employee who superannuates from the services of the Corporation does contribute towards attainment of the Corporation goals and a pension/medical benefit primarily provides old-age social security coverage:
IOCL SBF / PRMBF SCHEME CONCERN 1.Ex-servicemen particularly join the corporation in staff cadre at the age of 45-50 years in view of the age relaxation admissible to them as per Govt. guidelines and thus they have less than 15 years of service at the time of superannuation. 2.For instance Shri D. Sreekumar, ex-serviceman joined IndianOil as Jr. Optr. on 26.07.2012 at the age of 45 years and 2 months and will thus be derived of pension benefit under SBF Scheme by a margin of 2 months service. Considering the above genuine concerns, it is felt that every employee who superannuates from the services of the Corporation should be entitled to pension as well as medical benefits.
