80% Indian firms want govt to make retirement plans more tax friendly

Eighty per cent of India Inc feels the government should make retirement benefit plans more tax friendly in order to improve employee participation. As many as 70% feel increased employee education is needed, while 59% suggest making access to plans simple and easy. These are some of the noteworthy findings of The India Retirement Benefits Response Study by global advisory, broking and solutions company Willis Towers Watson.

The study gauges corporate India’s response to government initiatives aimed at leading the country towards being a pensioned society.

Employees’ provident fund (EPF) is seen as a strong pillar in supporting retirement adequacy goals with 59% suggesting widening its scope. At the same time, the National Pension System (NPS) continues to draw the attention of Indian employers with 67% suggesting making it compulsory. The study cautions that while NPS and EPF are designed for fundamentally distinct purposes, 57% companies want the government to provide employees an option between the two, whereas 54% suggest merging them.

Kulin Patel, director, Willis Towers Watson, says, “Recent government initiatives around driving pension adequacy are a step in the right direction and what is now required is implementation guidance. The study findings clearly indicate that employers are seeking greater clarity from the government around the role and inter linkages between various schemes like EPF, NPS and superannuation.”

The study also found that there is an increased employee interest around NPS with twothird employees frequently or occasionally seeking information around it. One in three surveyed organisations currently offer NPS and as many as 70% of those not offering, plan to implement it in the near future.

ONE IN THREE SURVEYED ORGANISATIONS CURRENTLY OFFER NPS AND AS MANY AS 70% OF THOSE NOT OFFERING, PLAN TO IMPLEMENT IT IN THE NEAR FUTURE.