Indian Oil Corporation Limited

Employees Superannuation
Benefit Fund Scheme
&
Post Retirement Medical
Benefit Facility

19th November, 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 Superannuation Scheme (Defined Benefit
Scheme) was introduced in IndianOil in November, 1987 for Officers
and Non-Officers.
 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 Minimum 15 years service .

the age of
superannuation
Separation from service Minimum 15 years service before
(other than separation.
superannuation)
 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  If the employee joins a PSU/Govt. the accumulated
resignation, after amount in individual account of employee shall be
completing transferred if there is a similar scheme in operation
minimum qualifying in the establishment of new employer, subject to
service of 15 years 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.
 IndianOil SBF Scheme
REFUND OF CONTRIBUTION

On separation due to  Employee’s accumulated direct

resignation, without contribution shall be refunded with
completing minimum interest thereon.
qualifying service of 15 years
 Ifthe employee joins a PSU/Govt., the
accumulated amount in individual
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.
 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.

 Inorder 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.

 TheTrust 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
 Asper 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.
Thank You