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ITY OF INDIA LIMITED
Corporole Office - ISPAT BHAWAN, IODHI ROAD, NEW DEIHI-l10003
Pers/ITB & Med./Pension/2019
29s April,2OL9
CIRCULAR
Subiect - Introduction of SAIL Pension Scheme for employees of SAIL
In line with the guidelines issued by Department of Public Enterprises [DPE), i
Government of India and with the approval of Ministry of Steel, SAIL Management is
pleased to introduce SAIL Pension Scheme.
2. SAIL Pension Scheme shall cover all executives (including Management
Traineesl on rolls of the Company on or after 1't fanuary, 2007 (including those
appointed at the Board level) and non-executives (including trainees recruited for
eventual employment) on rolls of the Company on or after L't January, 201'2'
3'TheSchemeisa,DefinedContribution'Schemeandwouldbeoperatedthrough
'SAIL Pension Trust', constituted for the purpose.
4. The approved SAIL Pension Scheme covering details like eligibility for availing
benefits, employer/ employee contributions, mode of payment of benefits, nominations
and other conditions, is annexed.
5. Eligible ex-employees/ employees may logon to SAIL Website (www.sail.co.in)
for more details.
6. This issues with the approval of Competent Authority.
DGM [PersonnelJ
SAIL Corporate Office
Distribution
1. Heads of Personnel, SAIL Plants/ units
Z. Executive Director, Chairman Secretariat
-/(, SAIL PENSION SCHEME
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SAIL PENSION SCHEME
1.0 OBJECTIVE:
To provide social security and monetary benefit to the employee/ nominee of
the employee in the form of annuities upon his/her superannuation/ deathl
permanent disablement & incapacitation (including cases of permanent total
disablement) leading to cessation of service.
2.0 SCOPE AIID EF'F'ECTIVE DATE:
The Scheme will cover all executives (including Management trainees) on
rolls of the company on or after 01.01.2007 (including those appointed at the
Board level) and non-executives (including trainees recruited for eventual
employment) on rolls of the company on or after 01.01.2012. The employees
on Contract Appointment or deputation from other organizations/ Central/
State Government, shall not be covered.
New entrants joining the company after 0l.01,2007, as executives (including
those appointed at the Board level) and after 0l .0l.z0lz, as non-executives,
shall also be covered under SAIL Pension Scheme from the date of their
joining SAIL.
3.0 ELIGIBILITY:
3.1 All regular employees who have completed minimum l5 years of continuous
service and superannuate from the Company will be eligible for the benefits
under this Scheme. Cases of death / permanent disablement & incapacitation
(including cases of permanent total disablement) leading to cessation of
service, shall be eligible for Pensionary benefits irrespective of duration of
service rendered.
4.0 CONTRIBUTIONS:
4.1 The contribution under the Scheme shall be made to the SAIL pension Fund to
be managed by a Trust notified by the Management.
4.2 The employer's contribution to the Scheme will be a percentage of Basic pay
plus DA. This percentage will be decided and notified by the company from
time to time, based on factors like affordability, capacity to pay and
sustainability. The company will'pay it's contributions in a staggered/defened
manner as per its financial and liquidity position. There shall not be any
liability on account of interest.
4.3 The Company's contribution towards Pension Fund, would be as under:
o Upto Financial year 2014-15:
Executives: @ 9% of Basic Pay + DA from 0l/01/2007 till3l/03/2015
Non-executives: @60/o of Basic Pay + DA from 0ll0l/2012 till 3ll03lzol5
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SAIL PENSION SCHEME
For the financial year 2015-16 and onwards:
The Company contribution towards Pension shall be based on the
affordability, sustainability and capacity of the Company, measured as a
percentage of Profit Before Tax (PBT) to average Net-worth of the Company
as detailed hereunder:
If the percentage of PBT to average Net-worth is 8% or above, the
amount of Company's contribution towards Pension shall be limited
to 9%o of Basic Pay plus DA for Executives and 6%o of the Basic Pay
plus DA for Non-executives.
b. If the percentage of PBT to average Net-worth is lower than 8ol0, the
amount of Company's contribution towards Pension will be reduced
proportionately. However, a minimum Pension contribution is kept
at the rate of 3Yo of Basic Pay plus DA for Executives and2o/o of the
Basic Pay plus DA for Non-executives.
In case of loss during a Financial Year, the floor percentage of 3o/o
and 2%o for Executives and Non-executives respectively, would be
maintained.
For the above purpose, PBT will be considered before making provision for
Company's contribution towards Pension.
4.4 voluntary contribution by employee- The employee shall have the option to
make voluntary contribution towards Pension.
5.0 BENEFITS:
5.1 An employee eligible under the Pension Scheme/ his or her nominee (as the
case may be) will be entitled to the benefits under this Scheme.
5.2 The benefits under the scheme shall be payable only in the form of annuities
on notional date of superannuation of the employee from the services of the
company. However, in cases of DeathlPermanent Disablement &
Incapacitation (including PTD) leading to cessation of service, the benefits
would accrue on separation of the employee from the services of the company.
There is no provision for'commutation' of Individual Pension corpus with the
Trust, under this Scheme. The payment to the employee/nominee shall,
however, start from the date of purchase of annuity by employee/ nominee.
5.3 For the purpose of purchasing annuities, Trust shall approve an annuity
provider/ panel of annuity providers. Annuity would depend upon the
accumulated corpus available in employee's account (both Employer and
Employee contributions along with interest accrued from the date of deposit of
the contributions in the Trust). Annuify shall be paid to the employee/nominee,
as per the Annuity Plan opted by him/her from the various options offered by
the Annuity provider.
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SAIL PENSION SCHEME
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5.4 The decision of the Trust shall be final and binding on the employee or his/ her
nominee.
6.0 FUND MANAGEMENT:
The SAIL Pension Fund will be managed by the Trust constituted for the
purpose of providing pension to the members.
The Trust shall manage the SAIL Pension Fund 'in-house' as per guidelines
issued by the government or partlyl fully through PFRDA approved
Professional Fund Manager or through an IRDA approved Life Insurance
Company.
I
7.0 CONDITIONS:
7.1 Services rendered in the Government prior to joining SAIL will not be counted
for the purpose of computation of total service for availing the benefits under
this Scheme.
7.2 For the purpose of SAIL Pension Scheme, membership of an employee being
deputed by SAIL to other CPSE shall be deemed to be continuous and
uninterrupted for such period of deputation, provided such employee joins
back SAIL and superannuates from SAIL. Employer's contribution towards
pension corpus, in such cases shall be made by the borrowing organization.
Employer's and employee's contributions in such cases shall continue to be
paid directly to the Trust.
In the event of not receiving the payment as above, for the deputation period,
such period will not be considered for calculating the pension corpus for such
individuals. However, such period shall be reckoned for calculation of service
period for ascertaining eligibility under the Pension Scheme.
-a
I.J In the event of any employee resigning from SAIL and joining another CPSE
having broadly similar scheme or vice-versa, the entire amount of his
accumulated corpus can be transferred to such CPSE/ SAIL. However, the said
amount shall be transferred to the newly joined CPSE only on completion of
stipulated l5 years of continuous service (the service rendered in the Company
plus the service rendered in the newly joined CPSE). In such cases, the
employee shall request the trust in writing along with proof of continuation of
his service in CPSE for 15 years.
However, employees who resign from SAIL to join another CPSE, not having
a similar scheme, or any organization not being a CPSE (irrespective of
whether such scheme exists in that organization), or not joining any company,
shall not be allowed the benefit of employer's contribution, under the Scheme.
Refund of employee's contribution along with interest shall be subject to
applicable Income Tax Rules.
7.4 In the event that a broadly similar pension scheme is introduced in the newly
joined CPSE after the employee joins the said CPSE, subject to provisions of
clause 7 .3 above, the accumulated corpus may be transferred by the Company
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6 SAIL PENSION SCHEME
to the newly joined CPSE, provided the effective date of introduction of the
scheme is prior to the employee's release from the Company.
7.5 In the event of an employee joining another CPSE not having a similar pension
Scheme and maintaining lien over employment with SAIL, the employer's and
employee's contribution for the lien period shall not be payable to the new
company or the employee immediately and his accumulated corpus shall be
retained with the Trust. Service rendered by the employee during the lien
period shall be counted for calculating the stipulated minimum l5 years of
continuous service period. Further,
a. In case the employee and the borrowing cpSE desire, they wiil be
allowed to continue making their respective contribution to the trust and
the employee shall be eligible for pension benefits calculated on the
accumulated corpus, provided the employee superannuates from the
CPSE on fulfilment of stipulated period of service. However, if such an
employee resigns from the said cPSE before superannuation and either
joins an organization other than a GPSE or does not join anywhere, only
the employee contribution with interest will be refunded to the employee.
In such situation, the cPSE's contribution will be refunded back to the
said CPSE with accrued interest.
b. In the event such employee rejoins SAIL, the company's and emproyee's
contribution to the Trust shall resume from the date, the employee re-
joins SAIL.
c. Employee separating on account of Superannuation/ Death/ permanent
Disablement & Incapacitation (including prD), during the lien period
will be entitled for benefits from the accumulated corpus under the
Scheme.
7.6 Board level executives will be eligible for benefits under this Scheme provided
their total period of service rendered in continuity in cpSE(s) including the
period at Board level in SAIL, is not less than 15 years at the time of
superannuation. In cases where the Board Level executive joins and
superannuates from another CPSE having broadly similar scheme or vice-
versa, the entire amount of accumulated corpus can be transferred to such
CPSE/ SAIL, subject to provisions of clause 7.3 above.
Further, Board level executives, .who have not attained the age of
superannuation and also have not been granted extension by the Govemment,
shall be treated at par with other employees of the company after the period of
their contractual employment as a Board member, is completed. Accordingly
they shall be eligible for pension benefits, like all other employees of the
Organization, as per terms and conditions of the pension Scheme.
7.7 In cases of compulsory retirement, removal or dismissal because of
disciplinary proceedings, the annuity would be based only on member's
contributions, if any, and interest thereon.
7.8 The admissibility of benefits under this scheme to the employees against
whom disciplinary proceedings are pending at the time of supeiannuation, is to
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SAIL PENSION SCHEME
be regulated as per the Conduct, Discipline & Appeal Rules of SAIL or any
-employment
other Service Rules governing the terms of
employee.
of the SAIL
7.9 Admissibility of cases of vRS/ vSS for pension
benefits wiil depend on the
condition/ coverage under the respective VR
Scheme
8.0 MODALITIES:
8.t SAIL Pension Scheme is a ,defined contribution,
scheme.
8.2 The Scheme would be operated by the Trust.
The Trust shall act for and on
behalf of the employees of the Company in
any manner relating to the Scheme.
8.3 The. Trust/company wil maintain a
separate account for ail erigibre
employees, where the Emproyer/ Employee
contributions, with interest wiil get
accumulated.
8.4 All voluntary contributions by the emproyee under
the Scheme shail be made
by way of deduction from the satary of the emproyee as per his
authori sation/req uest.
8.5 SAIL Pension Scheme
and Company's contributions
d
under the Scheme are
ify, sustainability and capacity
of the Company to pay
for this Scheme are therefore
not guaranteed and can vary or even be refused
on the grounds cited above.
8.6 In the light of the current financiar and riquidity
position of the company,
payment of Employer's contribution
ircluding ur..urr, towaJs SAIL pension
Scheme, would be made in a staggered/deferred manner
uas"o on availability
of resources in due course of time. There
shail not be any riabirityon account
of interest.
87 The Scheme shall be subject to appricabre
provisions of Income Tax Act.
8.8
on the basis of guidelines/
time, with respect to pension
9.0
9l An.employee separate.d on account of superannuation/
permanent disabrement
& incapacitation (including PTD) ruy dru* the benefits
unoer ttre Scheme
notwithstanding any nomination made
6y him.
9.2 Each eligible employee wilr be required
to make his/her nominations for
receiving the benefits under the Scheme
in case of his/her death. AIr
nominations under the pension Scheme
shail be as per the provisions of
Provident Fund & Misceilaneous provisions
Act, 1952 (amended from time to
time).
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SAIL PENSION SCHEME
9.3 Nomination once made will continue until the employee requests a change in
nomination. An eligible employee may,.at anytime, without the consent of the
nominee, if any, revoke or change the nominee by filing a written notice of the
change to the Trustees.
9.4 If a nominee is either a minor or is unable to give a legal receipt/discharge to
the Trustees, the Member employee at the time of nomination, shall appoint a
guardian who is capable of giving a legal receipt/discharge to the Trust.
9.5 In the event of death of a member employee, wherein more than one
beneficiaries were nominated and the Member employee had failed to speciff
their respective shares, the benefits of the Pension Scheme shall be shared
equally amongst the beneficiaries. If any designated Beneficiary dies, the share
of such Beneficiary shall terminate and his share shall be payable equally to
the remaining Beneficiaries.
9.6 In the absence of nomination under the scheme, the nomination(s)
made by the employee under Provident Fund/Gratuity (nomination under pF
to prevail in case two separate nominations are given in PF & Gratuity) would
be treated as the nomination under this Scheme.
9.7 Nominee of the deceased member employee will be required to nominate the
person who will receive the benefits under the Pension Scheme in the event of
his/her death.
IO.O RBVIEW:
chairman, SAIL reserves the right to amend, review or discontinue the scheme
as per Government/ DPE guidelines at any time. chairman, SAIL may also
further approve the working modalities for SAIL pension Scheme, as and
when required.
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