Leave Encashment

As an acknowledgement of an employee's loyalty, the employer may choose to offer them leave encashment benefits. Leave encashment is the amount payable for the employee's leave period, depending upon the leaves to his credit and his salary at the time of termination of employment. This amount may be paid to the employees (or to their dependents) on retirement, death or disability.

Leave encashment liabilities' increase over time, with the increase in an employee's years of service and salary. Such leave encashment could be a huge liability to the company. Group Leave Encashment Plans help reduce the financial strain on the employer by helping them fund their Leave encashment liabilities payable to employees.

BSLI offers fund management for Leave Encashment Scheme through Group Unit Linked Plan (GULP) and Guaranteed Interest Credit (GIC).

BSLI Offerings

Group Unit Linked Plan (GULP)

Key Features:

Get more for less through efficient returns - We offer an opportunity to earn market-linked returns on the Gratuity Contribution.

Choose your fund. Choose your future

The Unit-Linked platform offers the benefit of ten investment funds

Investment Fund	Risk Profile	Asset Allocation	Min.	Max.

Group Fixed Interest	Low	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%


Group Bond	Medium	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Gilt	Low	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Secure	Medium	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	80% 10%	90% 20%

Group Stable	High	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	65% 20%	80% 35%

Group Growth	High	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	50% 30%	70% 50%

Group Floating Rate	Low	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Protection	High	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Money Market	Very Low	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Short Term Debt Fund	Very Low	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%

Manage your risk with protection fund option

At the time of inception of the policy, we also offer you an opportunity to preserve your capital.

Initial Allocation

We offer unique value added benefit of additional units up to 5% of the initial contribution.

Feel free to Switch Funds

To enable you to manage the risk and optimize the returns based on market performance, you have the option of changing the allocation in various funds.

Guaranteed Interest Credit (GIC)

Key Features:

Earn a guaranteed Interest rate: Interest rate is guaranteed across the different deposit tenures at a compounding rate for contributions to the Group Gratuity, Leave Encashment and Pooled Superannuation funds.

Flexibility to choose your tenure: You have the convenience of choosing your guaranteed interest deposit tenure as 3, 5, 8 or 10 years.

Enjoy a mandatory life cover: The policy provides a mandatory flat/graded Life Insurance cover for all employees provided the sum assured is equal to future service gratuity contribution or a minimum of Rs 1000 per employee.

Know your returns upfront: The policy allows you to know your guaranteed returns before getting into the contract thus providing complete transparency.

Minimal surrender charges: Surrender charges are as low as 0.5 per cent in the 1st year, 0.25 per cent in the 2nd year and NIL thereafter.

Group Value Plus Plan (GVPP)

Key Features:

Multiple Plan Options
You have a choice of five plan options A, B, C, D and E that enable you to select suitable plan fulfilling your specific needs.

Manage Multiple or Single account for each scheme/member
You may specify the number of accounts you want to maintain. Your premium will be invested account wise and fund value will be tracked for each account separately. Your policy can be managed with multiple accounts as well as different fund allocation to suit each account. Additionally, you have the freedom to open new accounts at any time by paying fresh premium specified at the time of payment.

Flexible premium anytime
You have the convenience to pay the premium in one or more installments. Also, you may pay premium at any point of time

Customised investment portfolio as per changing needs
You have a choice of market cycle or self managed options to manage your investment portfolio.
In the Self Managed option, you have the freedom to decide how to invest your premiums. We offer eleven investment fund options to suit your specific needs. Under the MarketCycle Option, your portfolio will be structured as per your risk profile – you can decide whether you are Aggressive, Moderate, Conservative or Assure in your approach towards investments. Your portfolio will then be monitored and administered by us, saving you the time and effort involved in overseeing it yourself.
You can change the risk profile anytime that too free of charge. The rebalancing of the MarketCycle Option is also free of charge.
You also can switch from Self Managed Option to MarketCycle Option or vice versa at any time.

INVESTMENT FUND OPTIONS
The portfolio of the different Investment Fund Options is given below:

Investment Fund	Risk Profile	Asset Allocation	Min.	Max.

Group Money Market	Very Low	Debt Instruments, Money Market & Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Short Term Debt	Very Low	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Gilt	Low	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Fixed Interest	Low	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Income Advantage	Low	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Bond	Medium	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	100% 0%	100% 0%

Group Secure	Medium	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	80% 10%	90% 20%

Group Stable	High	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	65% 20%	80% 35%

Group Growth	High	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	50% 30%	70% 50%

Group Growth Advantage	High	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	40% 30%	70% 60%

Group Growth Index Plus	High	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	40% 30%	70% 60%

Group Growth Multiplier	High	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	40% 30%	70% 60%

Group Growth Maximiser	High	Debt Instruments, Money Market and Cash Equities & Equity Related Securities	0% 80%	20% 100%

How Leave Encashment Works

Under the Group Leave Encashment Schemes, employers pay a yearly premium on behalf of the employees. Leave encashment due to the employee depends upon the leaves to his credit and his last drawn salary. On the exit of the employee, he is paid his due from the fund of the scheme, accumulated from the annual contribution by the employer.

Regulations

Eligibility and Scheme Coverage

	Leave Encashment benefit can be provided by the employers in addition to other retirement benefits, to employees in the age group of 18 to 65 years.
	According to the Accounting Standard (AS-15) of January, 1995 and amended Section 209 (3) of Companies Act, 1957, it has become necessary for employers to provide for the liability of leave encashment facility available to employee in the annual books of accounts.

Benefits

On death or resignation of the employee, the leave encashment would be paid from the fund of the scheme maintained with the fund manager to the employee, or his beneficiary.

Tax Treatment

For employees

Under Section 10(10AA) of the Income Tax Act,

	For Government employees, the leave encashment benefits received at the time of retirement are tax free.
	For non- Government employees, leave encashment benefits are exempt from taxes subject to the least of the following amounts
	Rs 3 lakh
	Ten months' average salary - Average salary implies the average of the salary drawn during the last ten months prior to retirement.
	Cash equivalent of the leave due at the time of retirement
	Leave encashment actually received at the time of retirement

For the employer

The actual payment made towards leave encashment is allowed to be treated as a business expense.