GRATUITY AND SUPERANNUATION
Employees play a major role in growth of any organization. Payment of gratuity by an employer is a mechanism devised to recognize the efforts of employees who remain associated with the organizations for a long period of time and also, serves as an instrument of social security to such employees in the event of termination, resignation, retirement, superannuation, death.
Defined Benefit Plans: As the name suggests, In these schemes, the employee has fixed defined benefits, depending on their service, rank and salary. It is regardless of their contribution to the plan they are entitled to the pension.
Defined Contribution Plans: These schemes are better to manage as the final benefit is directly correlated with contribution by employer and employee. Most modern pension schemes are defined contribution plans.