RetirementFinancial Glossary
Superannuation
Definition
A retirement benefit scheme offered by some employers where the company contributes a fixed percentage of the employee's salary (typically 15% of basic) to a superannuation fund. On retirement, the employee receives the accumulated amount as a pension or lump sum. Employer contributions up to Rs 1.5 lakh per year are tax-exempt.
Why It Matters
Superannuation is an additional retirement benefit beyond EPF and is common in larger companies and MNCs. If your employer offers superannuation, it is essentially free money toward your retirement. Understand the vesting period (typically 5 years of service) — leaving before vesting means forfeiting the employer's contribution.