SAIL Pension Scheme

To provide social security and monetary benefit to the employee/ nominee of the employee in the form of annuities upon his/her superannuation/ death/ permanent disablement & incapacitation (including cases of permanent total disablement) leading to cessation of service.

The Scheme will cover all executives (including Management Trainees) on rolls of the Company on or after 01.01.2007 (including those appointed at the Board level) and non-executives (including trainees recruited for eventual employment) on rolls of the Company on or after 01.01.2012. The employees on Contract Appointment or deputation from other organizations/ Central/ State Government, shall not be covered.

New entrants joining the Company after 01.01.2007, as executives (including those appointed at the Board level) and after 01.01.2012, as non-executives, shall also be covered under SAIL Pension Scheme from the date of their joining SAIL.

Eligibility Criteria of SAIL Pension Scheme

All regular employees of the Company and Board level Executives will be eligible for the benefits under this Scheme. Cases of separation including superannuation / resignation (on or after 01.01.2017) / death / permanent disablement & incapacitation (including cases of permanent total disablement) leading to cessation of service, shall be eligible for Pensionary benefits irrespective of duration of services rendered.

Employees resigning on or after 01.01.2017 shall be covered under SAIL Pension Scheme.

The employees resigned from the services of the Company prior to 01.01.2017 will not be eligible for pensionary benefits. 

Contributions of SAIL Pension Scheme

The contribution under the Scheme shall be made to the SAIL Pension Fund to be managed by a Trust notified by the Management.

The employer’s contribution to the Scheme will be a percentage of Basic Pay plus DA. This percentage will be decided and notified by the Company from time to time, based on factors like affordability, capacity to pay and sustainability. The Company will pay it’s contribution in a staggered/deferred manger as per its financial and liquidity position. There shall not be any liability on account of interest.

The Company’s contribution towards Pension Fund, would be as under:

I. Upto Financial year 2014-15

o Executives : @ 9% of Basic Pay + DA from 01/01/2007 till 31/03/2015
o Non-Executives : @ 6% of Basic Pay + DA from 01/01/2012 till 31/03/2015

II. For the financial year 2015-16 and onwards:

The Company contribution towards Pension shall be based on the affordability, sustainability and capacity of the Company, measured as a percentage of Profit Before Tax (PBT) to average Net-worth of the Company as detailed hereunder:

a. If the percentage of PBT to average Net-worth is 8% or above, the amount of Company’s contribution towards Pension shall be limited to 9% of Basic Pay plus DA for Executives and 6% of the Basic Pay plus DA for Non-Executives. 

b. If the percentage of PBT to average Net-worth is lower than 8%, the amount of Company’s contribution towards Pension will be reduced proportionately. However, a minimum Pension contribution is kept at the rate of 3% of Basic Pay plus DA for Executives and 2% of the Basic Pay plus DA for Non-Executives.

In case of loss during a Financial Year, the floor percentage of 3% and 2% for Executives and Non-Executives respectively, would be maintained.

For the above purpose, PBT will be considered before making provision for Company’s contribution towards Pension.

However, from 01.11.2021 onwards, the amount of Company’s contribution towards Pension for Non-Executives shall be similar as applicable to executives, as above (i.e. limited to 9% of Basic Pay plus DA in place of existing 6% with minimum pension contribution at the rate of 3% of Basic Pay plus DA in place of existing 2%).

Further, in case of loss during a financial year, the floor percentage of 3% as against 2% would be maintained.

Voluntary Contribution by employee — The employee shall have the option to make voluntary contribution towards Pension.

Benefits of SAIL Pension Scheme

An employee eligible under the Pension Scheme/ his or her nominee (as the case may be) will be entitled to the benefits under this Scheme.

The benefits under the Scheme shall be payable only in the form of annuities on notional date of superannuation of the employee from the services of the company.
However, in cases of Resignation, Death/Permanent Disablement & Incapacitation (including PTD) leading to cessation of service, the benefits would accrue on separation of the employee from the services of the Company. There is no provision for ‘commutation’ of Individual Pension Corpus with the Trust, under this Scheme. The payment to the employee/nominee shall, however, start from the date of purchase of annuity by employee/nominee.

For the purpose of purchasing annuities, Trust shall approve an annuity provider/ panel of annuity providers. Annuity would depend upon the accumulated corpus available in employee’s account (both Employer and Employee contributions along with interest
accrued from the date of deposit of the contributions in the Trust). Annuity shall be paid to the employee/nominee, as per the Annuity Plan opted by him/her from the various options offered by the Annuity Provider.

The decision of the Trust shall be final and binding on the employee or his/her nominee.

Fund Management of SAIL Pension Scheme

The SAIL Pension Fund will be managed by the Trust constituted for the purpose of providing pension to the members.

The Trust shall manage the SAIL Pension Fund ‘in-house’ as per guidelines issued by the government or partly/ fully through PFRDA approved Professional Fund Manager or through an IRDA approved Life Insurance Company.

Conditions of SAIL Pension Scheme

For the purpose of SAIL Pension Scheme, membership of an employee being deputed by SAIL to other CPSE shall be deemed to be continuous and uninterrupted for such period of deputation. Employer’s contribution towards pension corpus, in such cases shall be made by the borrowing organization. Employer’s and employee’s contributions in such cases shall continue to be paid directly to the ‘Trust.

In the event of no contribution from the borrowing organization being received by the Trust, SAIL shall not be liable to make any contribution to the Pension Corpus for the period of deputation.

In the event of any employee resigning from SAIL and joining another CPSE having broadly similar scheme, the entire amount of his accumulated corpus can be transferred to such CPSE provided the same has not already been invested by the Trust.

In the event of an employee of another CPSE joining SAIL, the accumulated corpus of the said employee in the said CPSE can be accepted by SAIL.

However, employees who resign from SAIL to join another CPSE, not having a similar scheme, or any organization not being a CPSE (irrespective of whether such scheme exists in that organization), or not joining any company, shall be allowed the benefits under the scheme, as per his/her accumulated pension corpus amount.

In the event of an employee joining another CPSE having a similar pension Scheme and maintaining lien over employment with SAIL, the employer's contribution for the lien period shall not be payable. However, if the said employee so desires, his accumulated Corpus, till the date of commencement of his lien, can be transferred to either SAIL Pension Trust or the new company, on written request of the concerned organization. In the event of an employee joining another CPSE not having a similar pension Scheme and maintaining lien over employment with SAIL, the employer’s contribution for the lien period shall not be payable. However, if the said employee so desires, his accumulated Corpus, till the date of commencement of his lien, can be transferred to the SAIL Pension Trust, on request.

In case, the employee opts for retaining the corpus with the SAIL Pension Trust and the employee & the borrowing CPSE desire, they will be allowed to continue making their respective contribution to the trust and the employee shall be eligible for pension benefits calculated on the accumulated corpus.

In the event such employee rejoins SAIL, the Company’s and employee’s contribution to the Trust shall resume from the date, the employee re-joins SAIL.

Employee separating on account of Superannuation/ Death/ Permanent Disablement & Incapacitation (including PTD), during the lien period will be entitled for benefits from the accumulated corpus under the Scheme.

Board level executives, who have not attained the age of superannuation and also have not been granted extension by the Government, shall be treated at par with other employees of the Company after the period of their contractual employment as a Board member is completed. Accordingly, they shall be eligible for pension benefits, like all other employees of the Organization, as per terms and conditions of the Pension Scheme.

Modalities of SAIL Pension Scheme

SAIL Pension Scheme is a ‘defined contribution’ scheme.

The Scheme would be operated by the Trust. The Trust shall act for and on behalf of the employees of the Company in any manner relating to the Scheme.

The Trust/Company will maintain a separate account for all eligible employees, where the Employer/ Employee contributions will get accumulated.

All voluntary contributions by the employee under the Scheme shall be made by way of deduction from the salary of the employee as per his authorisation/request.

SAIL Pension Scheme is non-statutory in nature and Company’s contributions under the Scheme are dependent upon affordability, sustainability and capacity of the Company to pay. Contributions by SAIL for this Scheme are therefore not guaranteed and can vary or even be refused on the grounds cited above.

In the light of the current financial and liquidity position of the Company, payment of Employer’s contribution including arrears, towards SAIL Pension Scheme would be made in a staggered/deferred manner based on availability of resources in due course of time. There shall not be any liability on account of interest.

The Scheme shall be subject to applicable provisions of Income Tax Act.SAIL Pension Scheme shall be amended on the basis of guidelines/clarifications issued

by DPE from time to time, with respect to Pension schemes applicable to employees of CPSEs.

Nominations

An employee separated on account of superannuation/ resignation/ permanent disablement/ & incapacitation (including PTD) may draw the benefits under the Scheme notwithstanding any nomination made by him.

Each eligible employee will be required to make his/her nominations for receiving the benefits under the Scheme in case of his/her death. All nominations under the Pension Scheme shall be as per the provisions of Provident Fund & Miscellaneous Provisions Act, 1952 (amended from time to time).

Nomination once made will continue until the employee requests a change in nomination. An eligible employee may, at anytime, without the consent of the nominee, if any, revoke or change the nominee by filing a written notice of the change to the Trustees.

If a nominee is either a minor or is unable to give a legal receipt/discharge to the Trustees, the Member employee at the time of nomination, shall appoint a guardian who is capable of giving a legal receipt/discharge to the Trust.

In the event of death of a member employee, wherein more than one beneficiaries were nominated and the Member employce had failed to specify their respective shares, the benefits of the Pension Scheme shall be shared equally amongst the beneficiaries. If any designated Beneficiary dies, the share of such Beneficiary shall terminate and his share shall be payable equally to the remaining Beneficiaries.

In the absence of nomination under the Scheme, the nomination(s) made by the employee under the Provident Fund/Gratuity (nomination under PF to prevail in case two separate nominations are given in PF & Gratuity) would be treated as the nomination under this Scheme.

Nominee of the deceased member employee will be required to nominate the person who will receive the benefits under the Pension Scheme in the event of his/her death.