Group Superannuation

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Ironically today, when there are higher chances of outliving our savings, very few employees, are taking out enough time to plan their retirement. The majority of them are not even inclined to save for retirement regularly. Employees are a valuable asset to any company, and as an employer, you can retain staff for longer by looking after their needs such as assisting them in retirement planning.
Getting a retirement plan for your employees is highly beneficial not only for them but also for the organization. In fact, a well thought of plan can place a sizeable amount in the hands of your employee post-retirement, and it will cost you much lesser than other perks and bonuses offered to employees.


A well planned Group superannuation plan can provide employees a substantial retirement corpus. The amount received post-retirement can also be used as an annuity by the employees, hence providing them a regular stream of income even after they stop working. The employee may decide to take annuity on the entire amount or opt for using a portion of the corpus first and take annuity on the remaining amount. With such plan employees can quit worrying about how they are going to save enough towards their retirement, and are also motivated to stay with the company longer.

Benefits for the Employee

Besides the obvious of getting a fixed source of Income (post-retirement), there are several other benefits an employee receives with a Group superannuation plan. The amount contributed by an employee towards the superannuation fund qualifies for a tax deduction (up to Rs. 1 lacs). Also, contribution by the employer (up to Rs. 1 lacs) is not considered in the benefits of the employee. The amount received by the employee post-retirement is tax-free. If the amount is paid to the nominee due to death, then that amount is also tax-free. If the employee plans to change job, then he/she may also be able to transfer their superannuation account to his/her new employer, if permitted by the scheme. Finally, the employee also has an efficient tax saving plan with this scheme which offers multiple annuity options.

Benefits for the Employer

Employee recruitment can be quite a substantial expense of an organization, especially if there is a high attrition rate in the company. Hence it is important for an organization to take adequate steps in advance to ensure that the employees are retained for a longer period of time. Investing in such a retirement scheme for the employees is one way an employer can improve employee retention and motivation. It is a good way to reduce the cost of recruitment and also make your employees happy. Further, the amount paid by the employer towards the fund is treated as a business expense hence reducing the overall tax amount. Also, the amount received by the trustees on behalf of an approved superannuation fund is exempt from tax. Finally, the scheme can also help in attracting talented staff to the organization, which in turn means higher chances of growth for the organization.

How does Group Superannuation Differ from Employee Provident Fund?

ParametersGroup SuperannuationEmployee Provident Fund
ContributionNo mandatory contribution from employeesA contribution is made by both employer and employee
Regulatory bodyAs it is purchased from insurance companies, it is regulated by IRDAIIt is regulated by the Employees’ Provident Fund Organisation, India
PurposeIt is meant for retirement onlyFor the long-term welfare of employees that can include retirement also
Number of employeesIt can be started with any number of employeesA company should have a minimum 20 employees to start the EPF. However, if the number of employees is less than 20, the company can start the EPF, but it is voluntary
TaxabilityAt the time of retirement, you can withdraw 25% of the superannuation fund which is tax-free. The remaining amount is invested and attracts taxEPF withdrawal is taxable


Several investment options are available while opting for the superannuation fund and you can choose one which will provide maximum benefits to the employees. Getting the scheme is a prudent step for any organization, especially since employees, are secure that their retirement needs are being taken care of by an independent and professional company. Since the employees know the amount put into the scheme is handled prudently, they are hopeful of getting a sizeable retirement corpus. Finally investing in this scheme is a way to show your appreciation and gain the loyalty of your employees, who are the most valued assets of any organization.
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About The Author


MBA Insurance Management

With over 8 years of dedicated experience in the insurance industry, Himanshi has established herself as a leading expert in group insurance. As a prolific writer for SecureNow, she produces informative and engaging blogs and articles that shed light on the intricacies of group insurance, helping businesses and individuals make informed decisions about their coverage options. Throughout their career, Himanshi has developed a deep understanding of various aspects of group insurance, including employee benefits, policy selection, and risk management. Their expertise allows them to translate complex insurance concepts into clear, actionable insights, making their content an essential resource for readers looking to navigate the world.