RULES OF NAFED EMPLOYEES GROUP
GRATUITY-CUM-LIFE ASSURANCE SCHEME
DEFINITIONS ELIGIBILITY & REQUIREMENTS FOR MEMBERSHIP
In these rules, the headings shall
not effect the construction and unless (vi) "the Scheme" shall mean the
repugnant to the subject or context NAFED Employees Group
masculine shall include feminine and the Gratuity-cum-Life Assurance
following words and expressions shall have Scheme described in these
meanings assigned to them as follow :- rules.
(i) "the Company/the Employer" (vii) "the Rules" shall mean the
shall means The National Rules or the scheme as set out
Agricultural Cooperative below and as amended from
Marketing Federation of India time to time.
Ltd., New Delhi and shall
include any company, (viii) "the Trustees" shall mean the
corporation or association which Trustees for the time being of
may by purchase, amalgama- the fund.
tion or otherwise, take over in
whole or in part the business of (ix) "the Employees" shall mean
the Federation and which shall persons (other than apprentices
enter into a Deed, in such form and personal and domestic
as the Trustees shall require servants) employed by the
undertaking to continue the Employer and shall be deemed
obligations of the Company to include whole-time bona fide
under these presents and working Directors who do not
releasing the Company from all own beneficial shareholding
further liabilities thereof. carrying more than 5% voting
rights in the Company.
(ii) "the Corporation" shall mean the
Life Insurance Corporation of (x) "Eligible Employees" shall mean
India, established under section the persons who shall be
3 of the Life Insurance eligible to benefit by these rules
Corporation Act, 1956. as more particularly set forth in
rule 3 below.
(iii) "the Commissioner of Income-
Tax" shall mean the person (xi) "Members" shall means persons
appointed as such under sub- who, as eligible employees, join
section (i) of section 117 of the the Scheme and become
Income Tax Act, 1961 and entitled to benefits hereunder.
having jurisdiction over the fund.
(xii) "Original Members" shall mean
(iv) "the Trust Deed" shall mean Eligible employees who become
the Trust Deed executed by the members of the scheme on the
Federation and all amendments effective date.(xiii) "Nominee"
made thereto fromtime to time. shall mean the person
(v) "the Fund" shall mean the
Gratuity Fund as described in
the Trust Deed.
nominatedby the members from the effective date & (b) in
among the members of his relation to new members
family which for the purpose of admitted the Scheme after the
the employees covered by effective date the 1st day of the
Payment of Gratuity Act shall be month which is coincident with
deemed to consist of : or which next follow the date on
which they become eligible.
(a) in the case of the male
member, himself, his wife, (xviii) "Renewal Date", in relation to
his children, whether the member shall mean the
married or unmarried, his relavant Annual Renewal Date
dependent parents and the subsequent to the entry date.
widow and children of his
predeceased son, if any, (xix) "Superannuation Date" shall
and mean, in respect of the member,
the date on which he attains the
(b) in the case of a female age of 58 (Fifty eight) years, on
member herself, her attainment of which the member
husband, her children, shall vacate the employment;
whether married or
unmarried, her dependent (xx) "Service" shall mean continuous
parents and the dependent and uninterrupted service
parents of her husband and rendered by the member to the
the widow and children of employer and includes service
her predeceased son, if which is interrupted by sickness,
any. accident, leave, lay-off, strike or
lock-out or cessation or work not
Note : The employees who are not due to any fault of the member
covered by the Payment of concerned. For the purpose of
Gratuity Act, "Family: means the calculating the amount of
employees' spouse, legitimate Gratuity, a period of 6 months or
children, step children and over shall be reckoned as one
dependent parents, sisters and year.
(xxi) "Salary" shall mean all
The employee who does not emoluments which are earned
have a family at the time of by the member while on duty or
making a nomination, may make on leave, in accordance with the
the nomination in favour of any terms and conditions of his
person or persons. employment and which are paid
or are payable to him in cash
(xiv) "the Policy"shall mean the and shall include Dearness
Master Policy which Allowance but shall not include
incorporates the Assurance bonus, commission, house rent
effected under these Rules for allowance, over time and any
the benefit of the members and other allowance.
which policy shall be held by the
(xv) "the Effective Date", in relation
to the scheme, shall mean the 2. The Trustees to Act for Employer
1st day of December 1975 the and Members
date as from which the scheme
takes effect. The Trustees shall act for and on
behalf of the employer and the member and
(xvi) "Annual Renewal Date" in every act done by the Trustees, in
relation to the Scheme, shall consultation with or on instructions of the
mean the 1st day of December employer, in matter where the employer has
1976 and the 1st day of discretion under the Rules or is concerned,
December in each subsequent shall be binding on the employer and the
years; member. Every act done by agreement
made with and notice given to the
(xvii) "Entry Date" shall mean, (a) in Corporation by Trustees, shall be binding on
relation to the original members, the employer and the members.
The employees who satisfy the
following condition shall be eligible to
3. (a) Eligibility participate in the scheme; "Employees who
on the entry date are aged not less than 18
years and who are in the confirmed service declared to be uninsurable the Corporation's
of the employer, provided further that those decision about the insurability of the
employees who are on deputation or on employee shall be final and binding on the
contract employment would not be eligible members and the Trustees.
under these rules for the gratuity benefits.
Employees who are in the srvice of
the employer on the effective date and 6. Contributions
satisfy the above conditions shall join the
scheme as from that date. Present (i) Annual Contributions : These shall
employees who do not satisfy the above be duly paid for each member annually in
condition on the effective date and advance on the entry date and subsequent
employees appointed by his employer after annual renewal dates, such contributions as
the effective date, shall join the scheme on are required to secure the assurance
the entry date which is coincident with or hereinafter described.
which next follows the date on which they
satisfy the said condition. The contribution shall be paid
throughout the future service of the member
It shall be a condition of service for until his superannuation date, unless
future employees that they must joint the determined earlier under the Rules.
Scheme on the entry date coincident with or
next following the date on which they When the sum assured under the
become eligible. assurance is changed, the annual
contributions payable for the member shall
(b) No member shall withdraw from the be appropriately adjusted. The contributions
scheme while he is still an eligible employee shall be ascertained by the Corporation
in the service of the employer. under the appropriate plans of assurances.
4. Evidence of Age (ii) Additional Contributions : In addition
to the contribution payable under paragraph
Evidence of age of every eligible (i) above, the employer shall pay to Trustees
employee satisfactory to the Corporation contributions of an amount which shall be
shall be furnished before he is admitted to determined by the Corporation and the
the membership of the scheme and if the corporation shall require the employer to pay
age of the member be conclusively proved these additional contributions to the
later to have been incorrectly stated in the Trustees for the purpose of the Scheme.
evidence submitted, shall correspond to the The said contributions shall, however, not be
benefits under the Assurance effected under paid to the Corporation but shall be held by
the scheme what he could receive had his the Trustees in the Surplus Account or any
correct age been stated on the entry date. other account as the Trustees may deem
The Corporation shall have right to make appropriate. The Trustees shall have
such adjustment in the benefits as it may in absolute and uncontrolled discretion to
its absolute discretion decide having regard utilise out of these contributions or the
to the normal practice in this behalf for the Surplus Account any sum which together
time being in force. with the benefits under the scheme, may be
required to make up the whole of amount of
5. Evidence of Insurability gratuity due to the member under the
provision of Appendix 1 hereto.
For the purpose of effecting
assurance under Term Assurance Plan in Provided however that if the balance
respect of the member evidence of to the credit of Surplus Account together
insurability satisfactory to the Corporation, with the sum payable under the provisions of
will be required prior to each eligible the rules is insufficient to make up the whole
employee's entry into the scheme and on of the amount accrued and payable to the
each occasion when an increase in sum member according to the said Appendix (1),
assured under the Assurance is to be the employer shall pay to the Trustees such
granted. additional contribution as may be required to
make up the deficiency in the gratuity
If, in the opinion of the corporation, payable to the member.
the evidence submitted is not satisfactory or
other special hazards exist the Corporation (iii) Special Contribution : Subject
may vary the terms of acceptance of the risk always to any general or specific directions
in respect of member. In case the evidence given by the Commissioner of Income-tax
submitted makes the life of the member the employer may pay any sums to the
ineligible for insurance on his entry date for trustees by way of special lump sum
initial sum assured or on any subsequent contributions and upon paying such sums
renewal date on which the member is shall give instructions to the Trustees as to
their allocation for the benefit of all or preceding the Superannuation date
specified members of their dependents and multiplied by the total number of years of
the dates as of which the said contributions service completed by the Member, subject
may be appropriated. The contributions to a maximum of 20 months' salary.
shall be paid by the employer to secure the
benefits vesting absolutely or contingently in Member, who has not rendered 5
the member in respect of the member years' service, shall not be entitled to any
service prior to the date of his admission to benefits hereunder. The assurance effected
the membership of the Scheme. in respect of such members would be
surrendered by Trustees and the surrender
Provided that in any case the value credited to Surplus Account.
contribution payable by the employer in
respect of any member in terms of 9. Benefits on Death Whilst in Service
paragraph (i) and (ii) and (iii) hereof shall not Before Superannuation Date
exceed 8 1/3% of the salary of the member
for the year in respect of which the In the event of death of the member
contribution is paid. before Superannuation date whilst he is in
service of the employer, there shall be paid
(iv) The expenses of administration of to the Trustees a sum which shall be the
fund and the scheme incurred by the total of :
Trustees shall be borne by the employer, the
employer shall not claim such expenses as (i) The sum, if any, for which the
deductible expenses in computing his member's life was insured under
business profits or losses for the purpose of Term Assurance on the date of
Income-tax Assessment. death and
SECTION III (ii) the value of assurance under
7. (a) Assurance : Subject to the The Trustees shall pay to the nominee
provision of Rule 5, appropriate assurance the benefits in accordance with the
on the life of each member under a Plan provisions of Appendix (1)
suitably combining one year Renewal Group
Term Assurance with Pure Endowment (with 10. Benefits on Retirement After
return of premiums) will be effected to Superannuation Date or Death
secure the benefits as described in section Whilst in Extended Service
IV below. All assurances necessary to
provide the benefits shall be effected only If with the consent of the employer,
with the Corporation. a member remains in service after
superannuation date, no further
(b) Changes in Assurances : Subject to contributions will be payable in respect of
the provision of rule 5 when the member's him. The payment of benefits will be
salary is changed, the assurnces effected in deferred until his actual retirement or death
respect of him will be appropriately adjusted. during such extended service. Upon the
Such adjustment in assurances shall be member's actual retirement or death, there
effected on the Annual Renewal Date which shall be paid to the Trustees the sum that
is coincident with or which next follows the would have become payable had the
date on which the change in salary becomes member retired at Superannuation Date,
effective. together with interest thereon at the rate to
be determined by the Corporation on the
(c) Limitation of Assurance : If the said date calculated up to the date of his
contribution payable in respect of the actual retirement or up to the date of death,
member under Rule 6 is not sufficent to as the case may be, and the Trustees shall
secure the benefits as described in section pay to the member or the nominee as the
IV below, the benefits in respect of the case may be, the benefits in accordance
memebr shall be reduced to an amount as with the provisions of Appendix (1).
can be secured by the contribution.
11. Retirement Prior to Superannuation
SECTION IV Date or Resignation or disablement
Due to Accident Disease
8. Benefits on Survival to
Superannuation Date If the member retires before the
superannuation date, the surrender value of
Upon a member's retirement at the Pure Endowment effected in respect of
superannuation Date, there shall become him shall become payable to the Trustees
payable to the Trustees, for the benefit of and the Trustees shall pay to the member
the member, an amount equal to 15 days the benefits in accordance with the provision
salary as on the Annual Renewal Date last of Appendix (1).
Term Assurance cover shall cease
as from the date the member ceases to be 14. Miscellaneous Provisions
The benefits assured under the
12. Adjustment in the Benefits on scheme are strictly personal and cannot be
Cessation of Service assigned, charged or alienated in any way
or shall not be liable to attchement in
(a) Any balance of the value of execution of any decree or order of any
assurance remaining over after Civil, Revenue or Criminal Court.
payment of the gratuity as
ascertained according to 15. Surplus Account
provisions of Appendix (1)
hereto having regard to the total Any additional contributions paid by
service completed by the the Employer under rule 6 and the value of
member and the circumstances the assurances in respect of a member
in which he ceases to be in the which do not vest in him for
service shall be transferred by any reason and lapse to the fund, shall be
the Trustees to the Surplus transferred to an account which shall be
Account. called the "Surplus Account".
(b) If the amount of gratuity payable The Trustees may, at their
to the member according to the discretion, utilise the amounts lying to the
provisions of Appendix (1) credit of the Surplus Account in part or full
hereto exceeds the value of the payment of the contributions payable in any
benefits payable to the Trustees year in respect of all or any of the then
under the assurance effected, current assurances or to provide additional
the trustees shall be entitled to benefits to all the members of their
pay the excess due to the beneficiaries.
member out of the Surplus
Account. 16. Discontinuance of the
(c) If the funds in the hands of the
Trustees in the Surplus Account (a) In the event of the
and the value of assurance discontinuance of the
hereunder are not sufficient to contributions to the scheme, the
pay the whole of the gratuity Trust hereunder shall, however,
payable to the member under continue until the assets of the
Appendix (1) the Trustees shall scheme have been distributed
utilise the additional as provided in the Trust Deed.
contributions payable in respect
of the member to make up the (b) The Pure Endowment
difference in the amount of Assurances will be converted
Gratuity. into paid-up assurances for
reduced benefits which will
(d) If a member is not entitled to become payable on the
any benefits under the superannuation date of the
provisions of Appendix (1) member or the value of
hereto, the trustees shall assurance shall become
surrender the assurance payable on cessation of service
effected on his life for immediate or on the death of the member.
cash value and the surrender Alternatively, the Trustees may
value so realised shall be surrender the Master Policy and
transferred to the Surplus realise the surrender value
13. Surrender Value 17. Jurisdiction
Pure Endowment effected under the All assurances issued under the
Scheme will acquire surrender value scheme shall be Indian contracts. They will
immediately upon payment of the first year's be subject ot the Laws of India including the
premium in full. The surrender value will be Indian Insurance Act, 1938, as amended,
calculated in accordance with the Rules of the Estate Duty Act 1953, as amended, the
the Corporation. One year renewable term Life Insurance Corporation Act, 1956, the
Assurances are not entitled to any surrender Income-Tax, 1961, the Payment of Gratuity
value. Act 1972 and to any legislation subsequently
introduced. All benefits under the scheme
shall be payable only in India. Should members for the sum so
anything contained in these rules, or in any deducted.
amendment made thereof be repugnant to
any provision or provisions of the Incoem- (b) Estate Duty : Where any liability to
tax Act, 1961 or the Income-Tax Rules, estate duty arises in respect of any benefits,
1962 it shall be ineffective to the extent of the Trustees shall apply thebenefit or part of
such repugnance. Any such repugnance it in payment of such duty including any
shall be removed by the Trustees, if so interest thereon and deduct the amount so
directed by the Commissioner of Income- paid from teh benefits or may postpone the
tax. payment of the benefits until the liability has
been provided for, to their satisfaction.
If anything contained in these Rules
is in con travention of the Provisions of the Provided that if the beneficiary
Payment of Gratuity Act, 1972, or rules satisfies the trustees that duty
made thereunder, the Income-tax Rules the has been paid or shall be paid
provisions of the said Act and rules shall or that no duty is due, the
prevail. Trustees shall have the
discretion to pay the benefits
18. Rates of Premium and Conditions subject to the beneficiary
of Assurance furnishing indemnity or
indemnities in the form and
The rates of premium and manner prescribed by them.
conditions under which the Corporation is
prepared to arrange the scheme shall be (c) If the Gratuity Fund and
subject to an agreement between the Scheme for any reason ceases
Trustees and the Corporation. By giving to be approved by the
three months' written notice, taking effect on Commissioner of Income-Tax,
and from the next following Annual Renewal the Trustees shall nevertheless
Date, the conditions of assurance and rates remain liable to tax on any
of premium may be amended from time to benefits paid to any member or
time in respect of all assurances on the lives his beneficiary.
of new entrants to the scheme and additions
to Assurances of existing members to be 21. Nomination
effected on and from the date of expiry of
such notice. Assurances existing at the time (a) Every member will be allowed to
of such alternation or alternations shall not make a nomination conferring
be affected in any way. on one or more members of his
family the right to receive the
By giving three months' notice in benefits in the event of his death
writing effective on the next following Annual before the benefits become
Renewal Date, the Corporation has the right payable or having become
to terminate the Terms Assurance and payable, have not been paid.
reissue them on such terms and conditions The nomination shall be made
as the Corporation shall decide. in the Form given in Appendix
(II) and shall be delivered to the
19. Master Policy Trustees.
The Corporation will issue a single (b) If a member nominates more
Master Policy incorporating all the than one person, he shall in his
assurances effected by the Trustees for the nomination, specify the amount
benefit of the existing and new members of or share payable to each of the
the scheme. nominees in such manner as to
cover the whole of his benefits
20. Income-Tax and Other Taxes that may be payable in the
event of his death.
(a) In any case where the Trustees
or the Corporation are liable to (c) where a member has a family at
account to the Income-tax the time of making a
authorities for income tax on nomination, the nomination shall
any payment made under the be in favour of one or more
rules, the Corporation or the members belonging to his
Trustees shall deduct a sum family. Any nomination made
equivalent to such tax from any by the member in favour of a
such payment made and the person not belonging to his
Corporation or the Trustees family shall be invalid.
shall not be liable to the
(b) If at the time of making a respect of such interest. If the
nomination, the member has no member has not made a
family, the nomination may be in nomination then the benefits
favour of any person or shall be paid to the heirs.
(c) persons, but if the member 22. Interpretation of Rules
subsequently acquires the family,
such nomination shall forthwith be It shall be a condition of membership of
deemed to be invalid and the the scheme that on any question arising on
member may be allowed to make a any point of interpretation of these rules or
fresh nomination in favour of one of any point relating to admission of new
more members of his family. members and cessation of membership, the
decision of the Trustees shall be final. If the
(e) A nomination made by a decision has any bearing on the provisions
member may, at any time, be of part C of the fourth schedule of the
modified by him, after giving a Income Tax Act, 1961 or the rules made
written notice to the Trustees in thereunder, it shall be forthwith reported to
the manner as prescribed by the the Commissioner of Income Tax and if the
Payment of Gratuity Act, 1972. Commissioner of Income Tax so requires,
If the nominee predecease the the Trustees shall review the decision.
member who may thereupon
make a fresh nomination in
Contingencies on the Happening of which Benefits
Benefits Become Payable
1. After the member has rendered 15 day's salary of the member as on the
service of not less than 5 years upon date of retirement for each year of sercive
his retirement on or after subject to a maximum of 20 months' salary.
15 day's salary of the member as on the
2. Upon death of the member whilst in date of death or disablement for each year
service after superannuation date or of service subject to a maximum of 20
upon the member becoming disabled month's salary.
due to accident or disease (rendering (a) In respect of a member who is
the employee incapable of performing declared to be insurable and for whom
work which he was capable of life cover has been granted :
perfoming before the accident or
disease resulting in such disablement) 15 days' salary of the member as on
the Annual Renewal Date last
3. In the event of the death of the preceding the date of death for each
member before superannuation date year of his anticipated service up to
whilst in the Service of the employer. the superannuation date but for his
earlier death subject to a maximum of
20 months' salary.
Provided that the benefits payable
hereunder shall not be less than the
benefits in paragraph (c) below :
NOTE : "Anticipated Service shall mean
the service which the member
would have completed had he
lived upon his superannuation
(b) In respect of a member who is
declared to be insurable on the Entry
Date and/or Annual Renewal Date,
but uninsurable on subsequent Annual
(i) Sum for which the member's life
was assured by the Corporation
under Term Assurance on the
date of death of the member
(ii) The value of Assurance under
Contingencies on the Happening of which Benefits
Benefits Become Payable
4. After the member has rendered
service for not less than 5 years, upon Provided that the total benefits payable vide
his retirement or the resignation from (i) and (ii) above shall not be less than the
service of the employer, prior of benefits in paragraph (c) below :
(c) In respect of a member who is
declared to be uninsurable on the
Entry Date and Annual Renewal Date
15 days' salary of the member as on
the date of death for each year of
service up to the date of death,
subject to a maximum of 20 months'
15 days' salary of the member as on the
date of leaving service, for each year of
service, subject to a maximum of 20
Notes : 1. Gratuity shall be wholly forfeited in case of termination of service of the member (a)
for riotous or disorderly conduct or any other act of violence on his part, or (b) for any
act which constitutes an offence involving moral turpitude provided such offence is
committed by him in the course of his employment.
2. In case of termination of service for any act, willful omission, or negligence by the
member causing any damage or loss to or destruction of property belonging to the
employer, gratuity above shall be forfeited to the extent of the damage or loss so
3. All gratuity benefits payable in respect of any member under the scheme shall be
paid only in a lump sum.
4. Salary for the purpose of this Appendix shall mean salary as defined in Rule 1 (xxi).
5.Service for the purpose of this Appendix shall mean service as defined in Rule 1 (xx).
FORM OF NOMINATION
particulars are given in the statement below, hereby nominate the person(s) mentioned below, to
receive the gratuity standing to my credit, in the event of my death before that amount has
become payable, or having become payable has not been paid and direct that the said amount of
gratuity shall be paid in proportion indicated against the name(s) of the nominee(s).
2. I hereby certify that the person(s) mentioned is/are member(s) of my family :
3. I hereby declare that I have no family.
4. (a) My father/mother/parents is/are not dependent on me.
(b) My husband's father/mother/parents is/are not dependent on my
5. I have excluded my husband from my family by a notice dated the
6. Nomination made herein invalidates my previous nominations.
Name in full Relationship Age of Proportion by which
with full address with the the the Gratuity will be
of nominee(s) member nominee shared
1. Name of member in full
4. Whether Married/
6. Post held with Ticket
or Serial No., if any.
7. Date of appointment
8. Permanent Address
Village.................................... Thana............................. Sub-Division Post Office ........................
District .................................................................. State ...........................................................
of the member
DECLARATION BY WITNESSES
Nomination signed/thumb impressed before me
Name in full and full Signature of
address of Witnesses witnesses
Certified by the Trustees
Certified that the particulars of the above nomination have been verified and recorded.
Dated : Signature of the Trustees
Acknowledgement to the Member
Received the duplicate copy of nomination filled by me and duly certified by the Trustees.
Date : Signature of the member
Note : Strike out the words/paragraph not applicable.