Sunday 13 November 2011
CIRCULARS OF REGISTRAR OF COOPERATIVE SOCIETIES, KERALA FOR 1973
No. 191/73 G3.
Office of the Registrar of Co-operative Societies
Trivandrum, 2nd February 1973
CIRCULAR No. 2/73
Sub: Co-operative Societies-Payment of gratuity to employees – Conversion into Life Insurance Corporation Group Gratuity life Assurance Scheme- Instructions ordered.
Ref: Registrars Circular No. 9/72 dated 25-2-1972.
The attention of all Co-operative institutions is invited to Section 62 of the Kerala Co-operative Societies Act and Rule 59 of the Kerala Co-operative Societies Rules, 1969 according to which all monthly paid employees on the permanent establishment of the societies shall be paid gratuity at the time of retirement. Instructions have already been issued in the Circular cited above for the creation of a gratuity fund by making annual contributions to the extent necessary and to show it separately in the balance sheet attached to the annual audit reports. It is also necessary to invest the gratuity fund separately so that it may be available for drawal as and when the employees retire from the service of the societies.
The Life Insurance Corporation of India has a scheme called “Group Gratuity-Cum-Life Assurance Scheme” under which the corporation is prepared to take over the gratuity liability of the societies and at the same time insure the lives of all the employees of the societies provided the societies agree to hand over to the L.I.C. annually the amount that they normally are expected to set apart for creating a gratuity fund from which gratuity is to be paid to the employees.
Under the existing rules every employee is entitled to gratuity not exceeding half month’s pay for every completed year of service subject to a maximum of 15 month’s pay. Under the Group Gratuity-cum-Life Assurance Scheme of the L.I.C. the society cannot only build up a reserve to meet this liability but also be able to pay to the dependent of the employee, in the event of his death before retirement, 15 month’s salary that the employee was drawing on the date of his death, irrespective of the length of service put in by the employee. In other words the employees’ lives got insured to the extent of 15 times the salary they will be drawing throughout their service without paying for it from their pockets. So far as the societies are concerned, the entire gratuity liability will be transferred to the Life Insurance Corporation under the scheme. In addition, the net cost to the society under this scheme will be far less than the liability of the society if it meets the gratuity liability by itself.
The Co-operative Institutions agreeable to implement the above scheme, may apply to the Senior Divisional Manager L.I.C. of India, Trivandrum-4 for further details.
T. R. Sankara Pillai
Registrar of Co-operative Societies