Company pension is definitely one of the most invaluable parts of an employee’s remuneration package. A remuneration package depends upon many factors. Whatever may those be, but these packages plays major role in motivating the staffs in working hard for their companies. The concept of pension comes at a later stage. Pension is a certain amount of money that an employer provides to its retired employees on a monthly basis. However, the employer from company’s fund does not provide this pension amount, instead during the working days of an employee, a small portion of the salary is deducted on regularly. The employee, when retires, receives this amount as pension.
Some companies giveaway a lump sum amount of money during retirement. This is a one-time amount that the company provides to the employee. And then, there are those types of companies that offer monthly pension (just similar to that of salary) to their retired professionals. It can be a better option for many, but then, opinions vary from one person to another. These days, several banks and financial houses offer pension schemes for people. Keep limited money for a certain time limit and enjoy lifelong pension (definitely a certain percentage). Also, there is a certain time limit before which the salary cannot be drawn. This can be problematic at times. But still, the salary schemes that promise one time monetary payment enjoys good client base and followers.
What about legal pension scheme ? There are many such schemes available. However, there are only two such schemes that are followed by most of the corporate houses. Also referred to as occupational pension schemes, these include final salary schemes and money purchase schemes.
If a company offers occupational pension scheme to its employees, then it clearly states that the company definitely contributes some amount from its funds for the employee’s pensions that may even include some additional benefits in terms of mediclaim, ex-gratia, bonus, and…