India

1. Study of International Employee Benefits Trends India

2. MARKET PROFILE • 3rd largest global economy3 • GDP over $4.2 trillion4 • Annual national income per capita: $8205 • Rapidly growing economy, but poverty is pervasive6 • Heavily agricultural (18% of GDP), but rapidly industrializing7 • Working age population (ages 15-64) expected to jump from 704 million in 2005 to 1.0 billion in 20308 • Median age: 23.8 years9 • Life expectancy at birth: 63.510 India – Profile

3. Retirement benefits are dominated by a government-mandated employer benefit called the Gratuity, by which every employee, upon leaving his or her employer after more than five years of service, collects 15 days of salary for each year of service.11 • Workers may also save for retirement with a tax-favored vehicle called a Public Provident Fund, to which some employers also contribute. • The life insurance market is dominated by the government-owned Life Insurance Corporation of India (LIC), but private insurers are entering the Indian market. • A new regulatory body, the Pension Fund Regulatory and Development Authority, is expected to pave the way for more modern financial products. BENEFITS AT A GLANCE India – Profile

4. TOP THREE FINANCIAL CONCERNS AND WORK/LIFE GOALS OF EMPLOYEES INDIA: MOST IMPORTANT BENEFITS OBJECTIVES CITED BY EMPLOYERS THAT OFFER BENEFITS CONTROLLING HEALTH AND WELFARE BENEFIT COSTS 96% INCREASING EMPLOYEE PRODUCTIVITY 96% HELPING EMPLOYEES MAKE BETTER FINANCIAL DECISIONS 90% ADDRESSING DIFFERENT ENEEDS OF EMPLOYEES 89% INCREASING EMPLOYEE JOB SATISFACTION 88% REDUCING HUMAN RESOURCES ADMINISTRATIVE COSTS 88% ATTRACTING EMPLOYEES 87% RETAINING EMPLOYEES 84% Percentages have been rounded to the nearest whole number India – Employer Perspective Indian employers surveyed place controlling costs and increasing employee productivity as more important benefits objectives than attracting and retaining talented workers which is hardly a surprising finding in a country with a huge labor surplus and an expanding population. Overview

5. India – Employee Perspective Employees say that despite their need for retirement products and insurance, such benefits are not a major factor in their employment decisions. However any current ambivalence about employer benefits may be more attributable to a lack of employee education about the value of various benefits products than to a lack of need. • Nearly half (48%) of Indian employees surveyed whose employers do not offer benefits would be interested in purchasing retirement planning products through their employer, even if they had to pay 100% of the cost. • 51% of Indian employees currently lacking employer-provided benefits say they would be interested in purchasing term life insurance through their employer, even if they had to pay 100% of the cost.

6. TOP THREE FINANCIAL CONCERNS AND WORK/LIFE GOALS OF EMPLOYEES INDIA: EMPLOYEES’ TOP CONCERNS ABOUT FINANCIAL SECURITY APPROPRIATE HEALTH INSURANCE 82% 81% JOB SECURITY 80% ENOUGH MONEY TO LIVE ON ENOUGH MONEY FOR CHILDREN’S EDUCATION 79% ENOUGH MONEY TO PAY BILLS DURING SUDDEN INCOME LOSS 79% RESOURCES AND TIME TO CARE FOR AGING PARENTS OR RELATIVES 79% BEING ABLE TO AFFORD QUALITY CHILD CARE 76% ENOUGH MONEY TO BUY A HOME 73% MORE TIME TO SPEND WITH FAMILY 73% ENOUGH MONEY SO ONE PARENT CAN STAY HOME WITH CHILDREN 71% Percentages have been rounded to the nearest whole number India – Employee Perspective When it comes to worries about retirement issues, a top financial concern among Indian workers surveyed is having enough money to take care of elderly parent or in-laws. Overview India Australia U.K. Study Methodology

7. Indian employers regard controlling costs and increasing employee productivity as more important benefits objectives than attracting and retaining talented workers. Despite the country’s labor surplus, benefits are seen by employers in certain service-sector industries – or in areas in which multinational outsourcing business has intensified demand for labor—as a way to satisfy highly skilled without driving up wages: Benefits Strategies for Tomorrow, Today • Companies offering health and life insurance provide two financial solutions that are in high demand. • Retirement planning products can provide employers with a long-term strategic option for meeting benefits goals. • Employers can work with providers of financial products to educate employees on how benefits can improve their financial security and quality-of-life. • Offering voluntary benefits is a way to increase the value of benefits offerings without increasing costs. India - Conclusions