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Journalism of Courage
The amount of money to be spent by top 100 listed Indian companies towards employee benefits,including pension,climbed to a whopping Rs 3,60,000 crore,says a report.
The findings are part of professional services firm Towers Watson8217;s 8216;Employee Benefits Accounting and Risk8217; study of the financial statements of BSE 100 companies.
8220;This can largely be attributed to the public sector banks8217; liabilities,which are fully reflecting the impact of wage revisions and the second pension option,8221; the report
said.
The estimate of Rs 3,600 billion Rs 3,60,000 crore is based on analysis of financial statements of BSE 100 companies for the financial year ended March,2012.
Meanwhile,the study revealed that unfunded employee benefit liabilities of companies declined to 14 per cent in 2011-12 fiscal. In the comparable financial year,the same was at around 20 per cent.
As per the study,pension continued to be the biggest contributor to total defined benefit liabilities at 52 per cent in the year ended March,2012. This is followed by
gratuity at 23 per cent.
Going by the report,if public sector banks are excluded 8216;Other8217; defined plans and gratuity were the biggest contributors at 42 per cent and 33 per cent,respectively.
8220;Increase in 8216;other8217; defined benefits liabilities over the past year can be attributed to greater disclosures by companies and particularly Provident Funds trusts,8221; it added.
The report also noted that public sector banks continue to face higher business costs and liabilities risks as compared to other sectors largely due to the defined benefit
pension liability.
Towers Watson India Director Client Account Management Kulin Patel said that Indian companies are increasingly becoming cautious and conscious about financial facets of employee benefits against the backdrop of uncertain and dynamic macro-economic environment.
Unfunded Defined Benefits liabilities have seen a decline in recent years,Patel added.
