Definition
Superannuation Fund
A superannuation fund is an employer-set retirement benefit scheme where the company contributes toward an employee's pension, separate from EPF and gratuity.
A superannuation fund is a retirement scheme some employers maintain, contributing a percentage of salary into a fund that provides the employee a pension or lump sum on retirement. It is an additional benefit beyond EPF and gratuity.
Employer contributions up to a limit are tax-favoured, while contributions above the prescribed ceiling can be taxable as a perquisite. On retirement, a portion may be commuted (taken as lump sum) with the rest as annuity.
Superannuation is more common in larger and older organisations; where offered, it adds to an employee's overall retirement security alongside other benefits.
Related terms
- GratuityGratuity is a lump-sum payment an employer gives an employee for long service, generally payable after completing five years, with tax exemption up to a prescribed limit.
- EPS ContributionThe Employees' Pension Scheme is funded by diverting part of the employer's EPF contribution; it provides a monthly pension after retirement based on service and pensionable salary.
- NPS (Employer Contribution)The National Pension System allows an employer to contribute to an employee's retirement account, with that contribution eligible for an additional tax deduction within limits.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.