Guide to Forming Gratuity Trust with Financial Institutions and LIC: Procedures and Compliance

I would like to know the procedure for forming a Gratuity Trust at our end (i.e., Company) with any Financial Institution, Bank, or LIC.

1. How do we register the Gratuity Fund and where should it be registered?
2. Are there any requirements to deposit premiums (monthly/yearly)?
3. Is there a specific format for forming a Gratuity Trust?
4. Where should the Trust Deed be submitted?
5. Is it mandatory to take insurance from LIC of India for the liabilities of the employees even after managing the Gratuity Fund by the company (Please refer to Section 4A of the Gratuity Act, 1972)?

We have to pay the gratuity amount directly to employees or is there another procedure for payment? Your prompt response would be appreciated.

Hi,

You can form a Group Gratuity Scheme with LIC. An agent from LIC itself will guide you about all the procedures. You can contact any agent at LIC. A resolution has to be passed by the authorized signatory and Trustees are to be assigned.

Regards,
Rashee