Gratuity is a lump sum payment given by the employer on resignation or retirement or death. It is a mark of recognition to the employee's service.
In India, as per the Payment of Gratuity Act, 1972, it is mandatory for all companies with employee strength of 10 or more employees to pay Gratuity. The provisions of the Act state that every employee who has completed 5 years of service with an organization is eligible to get the gratuity as per the pre-defined formula as given in the Act. The benefit is non-taxable up-to a ceiling of INR 10 lakhs.
Accounting standard classifies this benefit as a Post Employment Benefit and requires an Actuary to value these benefits for measurement, recognition and disclosures in the Financial Statements
During the course of an employment, an employee accrues leave. These leaves are to be exercised in accordance with the prevalent rules and company policy. There are different kinds of leave generally granted by the companies. Some examples are Casual leave, Earned/Privilege leave, Maternity leave, Sick leave and others.
If the leaves can be carried forward to the future years either for the purposes of utilization or for encashment, then the accounting standard categorizes such leaves as "Other Long term benefits". An entity is required to make provision in the books of accounts from a Actuary in respect of these benefits to comply with accounting standards and good corporate governance practices.
Most of the government organizations provide pensions to their employees are retirement. Since pension benefits are not mandatory for private companies, only few employers in private sector provide pension to their employees.
Pension is typically given to employees to ensure a stable livelihood post retirement. An actuary is required to value the pension liability for the company based on the pension rules. The measurement, recognition and disclosures in the Financial Statements will be on similar lines to Gratuity/ End of Service Benefit.
Provident Fund is a defined contribution scheme where the employer and employee contribute a fixed sum to Employees Provident Fund Organization.
If the provident funds have an exempt status, then the responsibility of provision of benefits rests in the hands of the employer. Employer needs to ensure that fund earns at least equivalent to EPFO rate or better.
An Actuary is required to certify the sufficiency of the funds and provision be made in the books of the employer for any shortfall in the funds.
In India, many companies have given ESOPs to their employees. ESOPs help ensure alignment of goals of the management and shareholders. We help companies design ESOP and other loyalty bonus schemes and value them for accounting and other purposes.
Employee benefits schemes should be stitched with a lot of care and diligence as they help defining employer-employee relations and have regulatory implications.
Owing to our core expertise in this domain, we provide clients with a 360 degree view of all stakeholders of scheme advantages and disadvantages and budget their current and future costs.
Kapadia Actuaries and Consultants (earlier known as Nalin Kapadia Actuarial and Financial Consultants or NKAFC), founded by Mr. Nalin Kapadia is a leading actuarial firm in India. Mr. Kapadia-(1935 to 2014) had an experience spanning over 50 years. He served as an appointed Actuary in LIC, as the President and the Honorary Secretary at the ‘Actuarial Society of India’ (now ‘The Institute of Actuaries of India’). Worked with an African organization and founded NKAFC. After the sad demise of Mr. Kapadia, Mr. Saurabh Kochrekar and Mr. Jenil Shah who worked and were trained under the supervision of Mr. Kapadia, took over the management of the firm as Partner Actuaries.
We pledge to provide prompt, efficient and professional services to all our clients and enterprises through comprehensive actuarial, accounting and tax solutions.
We aim to emerge as a global actuarial consulting firm providing sophisticated expertise in the form of actuarial services to corporate, individuals and financial service providers.
We perfom in an ethical and professional manner meeting the organizational needs of our clients. We invest in our team by recognizing and respecting the unique skills each member brings.
Every organization needs to set aside some reserves in order to meet the obligations of employee benefits which would arise in the future. It is uncertain when these obligations would arise and what would be the stature of the obligation. Valuation is the process of estimating the worth of an asset or liability. Since there is uncertainty of the payout of an obligation, it is probabilistically determined through the process of valuation.
An organization would want to maintain a balance between returns earned from business and building provisions to remunerate and satisfy its hardworking and loyal employees. At KAC, we understand the need of harmonizing this balance between maintaining profits and attracting and retaining the best of employees and assisting them in building a secure retirement for themselves.We assist the organizations with a bouquet of services like--
We value all types of employee benefit liabilities which are statutory or voluntary in nature as per all accounting standards.
The firm carries more than 30 years of experience in Actuarial valuation, Scheme design and Funding of Employee Benefit liabilities. Some key employee benefits specific to India
All businesses have their own set of risks. They can be broadly divided into two categories viz. financial and non-financial risks. Financial Risks include Market Risk, Business Risk, Credit Risk, and Liquidity Risk while non-financial risks include operational risk and external risk.
No doubt any business entity needs a robust risk management framework but the small and medium enterprises (SMEs) need much more than that as they may not have financial resources and professional ability to manage and control risks due to their very size and several limitations. As a result of their size and access to capital, small businesses face more acute challenges than ordinary businesses.
We work very closely with our clients, understanding their needs and providing value based solutions in a timely and efficient manner.
The excellence of our service is evidenced by a more than 98.5% client retention ratio including benefit valuation for more than
8.5 lakh employees in 2015-16 and still counting.
Our clientele reach is as follows
The distribution of companies for whom we have created value
We are backed by an enthusiastic team of qualified professionals, who are trained in the nuances of actuarial services and bring on-the-job experience in actuarial and financial analysis. Since, we not only have actuarial skills, but also skills in areas like- accounting and taxation, we can provide a comprehensive professional package.