An organization today, has not only to man the various positions with competent
and trained personnel but also has to create an environment wherein they
can give their best and derive a sense of well-being, a sense of fulfillment
and security and take pride in their continued association with the organization.
Provision of pension may be an attraction for such persons to continue
in the organization and give their best to the organization, as with continuous
improvement in longevity a regular income even after retirement has become
a necessity.
To provide the pension benefits to employees, an employer has two alternatives
under the provisions of Rule 89 of Income Tax Rules 1962.
- Create a privately managed trust fund and as and when a member retires,
purchase annuity from insurance company to provide pension for such retiring
member.
- Entrust the Management of the Pension Fund to insurance company by purchasing
its Group Superannuation Scheme.