The Social Security Code, 2020 (SSC 2020), along with three other labour laws has been notified. Companies are expected to comply with the new law effective from November 21, 2025. This presentation outlines our current interpretation of the new definition of "Wages," based on information available as of the notification date. It is intended to help employers assess the potential impact on gratuity liabilities and prepare for compliance under the new framework.

The funding decisions around employee benefit plans stem from tax, security and ongoing compliance. The why, when and where of employee benefit plan funding in India is presented in an FAQ format here.

The Social Security Code (SSC 2020) was passed by both houses of the Parliament and received the Presidential assent on September 28, 2020. The code has been enacted to amend and consolidate laws relating to social security with the goal to extend social security to all employees and workers in the organized and unorganized sectors. This code will be effective from a date yet to be notified by the Government. This document attempts to address the commonly raised queries by employers pertaining to the major changes of the SSC 2020 regarding remuneration, its impact on employee benefits, and the accounting implications.

An appropriate valuation haircut would be necessary for the IL&FS bond defaults. This default also weighs on the Pension Actuary's mandate while undertaking Exempt PF valuations. This article elaborates upon the existing professional and regulatory guidance to address appropriate default provisioning in exempt PFs.

Disclosures under accounting standards are increasingly relevant for compliance. For a granular tabulation on 'Post-employment' and 'Other long term benefits' under the Indian accounting standards AS 15 (R) and Ind AS 19, click here. The discussion could be useful to finance teams and auditors in mapping disclosures from the actuarial valuation reports drawn up for accounting compliance.

Evidence on Indian Defined Benefit Plans' a) investment risks, b) fund mandates and c) funding levels is presented for the financial years from 2014 and 2016. The discussion is particularly topical as post-employment benefit plans' forbearance to volatility of investment returns is higher in the IFRS-adapted Ind AS regime.

As compared with AS 15 (revised 2005), most changes that Ind AS 19 entail settle around recognition and disclosures, whilst only the measurement of return on plan assets is different. The article discusses the merits of obviating the measurement differences with appropriate assumptions that could be used in the transition year. The position would be useful as organizations change over from AS 15 (revised 2005) to Ind AS 19.

Organisations planning a transition to IFRS adapted Indian accounting standards from FY 2016-17 would find the attached discussion useful. The salient matters in the employee benefits' accounting transition as from AS 15 to Ind AS 19 are deliberated.

Ind AS 19's adoption from 2016-17 offers a platform to modify the approach toward asset allocation of Post Employment Defined Benefit Plans. The attached piece considers the aspects that would bear on trustees’ outlook, and provides pointers from behavioural finance.

Accounting of Employee Benefits under Accounting Standard (AS) 15 (Revised 2005) has substantially altered the approach and disclosures in financial statements of Indian Companies. A presentation that lays AS 15 (Revised 2005) threadbare can be accessed here.

The disclosures and methods of recognizing employee benefit costs under AS 15 (Revised) vary by the size of companies. Companies classified under AS 15 (Revised) as Small and Medium Enterprises have diluted requirements on disclosure and valuation. If you need to know the extent of disclosures and method of valuation for your company, a chart can be accessed here.

Latent once upon a time, deferred compensation is progressively becoming popular with overwhelming possibilities. The principles of measurement, recognition and disclosures could fall either on Share-based Payments (Ind AS 102) or Other Long-term Employment Benefits (Ind AS 19). The article discusses what to expect and how to implement the obligations for deferred compensation.

Higher employee withdrawal or attrition rates can steer pension costs — up, and down as well. An article published in 'The Actuary India' (February 2012 issue) demonstrates the multiple arcs that attrition rates can have when combined with salary escalation and discount rates. The article can be accessed here.

Behavioural finance is increasingly applied in diverse fields. In the discussion, eight behavioural finance theories shape the construct of general insurance product design and pricing. Options for implementation are contemplated.

Effective financial year 2011-12, Indian companies would be required to draw up their financial statements under the revised Schedule VI to the Companies Act, 1956. The impact of the revised Schedule VI on the disclosure of employee benefits is explained, as is the approach toward accounting and disclosure of pension assets under AS 15 (Revised). This presentation at the Institute of Actuaries of India's 'Current Issues in Retirement Benefits' seminar can be accessed here.

Employee Stock Options (ESOP) are a growing component among the many deferred compensation elements used. Modern-day accounting standards require companies to recognize ESOP cost in their financial statements. ESOP valuation guidance and techniques, particularly with reference to IFRS 2 on 'Employee Share-based Payments', can be accessed here.

Share option models draw from the theory of financial calculus. This presentation at the Western India Regional Council of the Institute of Chartered Accountants of India, which explains the underlying financial calculus on writing of share options can be accessed here.

For defined benefit plans, managing assets in line with the developing liabilities is a problem statement for trustees and sponsor employers. A deeper appreciation of duration – both of assets and liabilities, can be found in the discussion presented at a seminar of the Institute of Actuaries of India. This discussion would be helpful to trustees and sponsor employers to compute the liability duration and choose appropriate assets. Even for such trusts and employers who assume mismatch risks, a quantitative grasp of risks could be build from the tools presented.

The accounting of equity investments under Ind AS 109: Financial Instruments, like the accounting for bond investments, is driven by an insurer's business model. As insurers define the business model with reference to equity investments, the article attempts to establish an argument. Ongoing considerations after the first implementation are also discussed.

Ind AS 109: Financial Instruments identifies the 'business model' as the unique driver of investment accounting. It bears the question of the link between a life insurer's business model and thereupon the accounting of bonds. As insurers would have to define the business model as a guiding post to measurement and recognition of investment, the article attempts to deduce the link.

Ind AS 19's draft states that actuarial gains and losses on other long-term employee benefits should be classified under ‘Other Comprehensive Income.’ This discussion argues against this carve-out from the employee benefits’ international accounting standard IAS 19. The carve-out seems unintended and would result in higher effort with no particular local advantage. Standard drafters are urged to weigh the compliance effort and cost of this IFRS carve-out.

Proportionality in employee benefits draws from multidimensional sources: actuarial practice standards, guidance notes and accounting standards. Being aware of the various aspects of proportionality continues to be relevant today. "Appropriate to Requirements", a short discussion on proportionality in employee benefits actuarial practice, can be accessed here.

Ind AS 19 on "Employee Benefits" which becomes mandatory from financial year 2016-17 to listed and unlisted companies with net worth exceeding Rs 50 billion ushers a change in disclosures and accounting of employee benefits. A discussion with substantial emphasis on the actuarial as well as accounting aspects of Ind AS 19 can be accessed here.

Ind AS 102 on 'Share-based Payments' marks a significant shift in measurement, recognition and disclosure of costs, in particular a change from the currently functional 'Intrinsic Value' to the 'Fair value' approach. A discussion that explains Ind AS 102 whilst dwelling over the various important aspects can be found here.