The topic of funding of gratuity scheme remains unclear for many companies, due to a lack of regulatory framework and a general lack of understanding of actuarial principles.
We have examined the issue to consider for gratuity scheme funding in our prior post. This post sets out a list of frequently asked questions, from our own experience working with our clients:
1. My company's gratuity scheme is funded with LIC. Do we still need to get the actuarial valuation done for AS 15?
Yes, the fact that your gratuity is funded doesn't change anything as far as reporting under AS 15 is concerned. AS 15 is an assessment of your gratuity liabilities and how much you hold in assets to back them.