What is gratuity?
An end-of-contract gratuity is a certain sum of money put aside by the employer to be paid at the end of employment period. A Gratuity is a lump sum payment that is essentially payable by the employer and acts as a financial security and buffer at the time of employee’s retirement.
Present perfect
Employers have to build a corpus so that payments accruing in the future can be paid easily without causing an unnecessary burden on the financial resources. Finances have to managed from the present day itself so that the future can be planned intelligently. A company is required to not only calculate future exigencies but also to put apart a sum and invest it properly so that the entitlements can be paid off easily. This calls for proper management of finances and the unpredictable future.
A Practicing actuary is able to help a company manage the payables arising in the future through planning and management. Actuaries help calculate the present value of due payments and manage the uncertainties arising in the path of building a comfortable corpus.
Future Planning
Gratuity, leave encashment, pension funding and other compensations payable across the spectrum of employee’s lifetime of employment and beyond are a necessity that has to be fulfilled by the employer. The law requires the company to set aside funds so that an employee can attend to his personal and family needs arising in the future. Gratuity valuation helps companies cover volatile circumstances with planned investments so that employees can be paid their due recompense.
An end-of-contract gratuity is a certain sum of money put aside by the employer to be paid at the end of employment period. A Gratuity is a lump sum payment that is essentially payable by the employer and acts as a financial security and buffer at the time of employee’s retirement.
Present perfect
Employers have to build a corpus so that payments accruing in the future can be paid easily without causing an unnecessary burden on the financial resources. Finances have to managed from the present day itself so that the future can be planned intelligently. A company is required to not only calculate future exigencies but also to put apart a sum and invest it properly so that the entitlements can be paid off easily. This calls for proper management of finances and the unpredictable future.
A Practicing actuary is able to help a company manage the payables arising in the future through planning and management. Actuaries help calculate the present value of due payments and manage the uncertainties arising in the path of building a comfortable corpus.
Future Planning
Gratuity, leave encashment, pension funding and other compensations payable across the spectrum of employee’s lifetime of employment and beyond are a necessity that has to be fulfilled by the employer. The law requires the company to set aside funds so that an employee can attend to his personal and family needs arising in the future. Gratuity valuation helps companies cover volatile circumstances with planned investments so that employees can be paid their due recompense.
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