Gratuity Trust of a Company

[Ruby]

Hi All

Companies are required to form Gratuity Trusts for the administration
of the Gratuity Scheme. Couple of Senior management personnel are
identified as trustees for the trust and the signatures etc. are
obtained.The Scheme is managed by the Insurer- be it LIC or SBI or any
other approved insurer.

The query is this trust requried to have books of accounts, regular
meeting of trustees, audit, etc.? Also in most companies the intial
officers who were appointed as Trustees change and this may not be
reflected in the trust documents due to negligence or lack of
awareness. Please share your thoughts on this matter.

thanks

Ruby

[Astarag]

the change in trustees must be made through resolution and should be intimated .

 

recently the enhancement in gratuity limit necessited the Deed of varriation for ammending the clauses

in original trust deed. I have gone through the format prescribed by the lic for deed of variation

the drafting is such that you can not say that its a deed except that its on a 100rs stamp paper with common seal and few signatures and stamp

 

in many old companies you can not find the original deed also either misplaced or destroyed

 

It may be noted that there is huge accumulation of fund in gratuity fund with lic. and the fund is unclaimed and idle

 

 

 

 

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with regards,

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[Vedavathy Kabadi]

Ruby,

As you have understood, the Trust of a company should yes need to keep
the proper books of accounts as the company will be depositing a huge
amount with LIC.

There also need to be regular meetings for this Trust like how we
conduct the Board meetings.

In the initial document which will be made contains the officers names
and other details who will be appointed as the
trustees/chairman/secreatry for the trust but if there is any change
in the same can be intimated to the statutory authorities. Here it ll
be mainly the INCOME Tax department to whose notice such change need
to be intimated and the next is the LIC if they have any standard
format for the same. These changes can be through the Trust
resolutions itself.

This is what I have done and know about the Gratuity / Trust documents
as of now.

Thanks & Regards
Cs Vedavathy R Kabadi

[Ruby]

Thanks for your inputs.

Vedavathy: How was the intimation to IT auhtorities regarding
alterations to Trustees made? Is it only an intimation or approval?

If all the trustees resign from the company and this was not
regularised how can it be done?

Is there any regulation as to the number of meetings of trustees and
number of meetings? Or is this regulated by the Rules of the Trust?

thanks for the answers in advance.

regards

ruby

[Vedavathy Kabadi]

Ruby,

Whatever I did was all as per the trust deed. whether it is holding of
the meeting or intimating the authorities or any change in the
signatories.

Thanks & Regards
Vedavathy R Kabadi