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Indian Pros Lose Security Benefits In US


The Times of India

August 10, 2004



Yahoo Photo




NEW DELHI: Indians working in the US pay close to $1 billion for social security every year, but a majority of them do not get back their money when they return home. 

According to Nasscom, Indian IT professionals in the US contribute $600 million every year, but get zero benefit as they come back to India before they become eligible for the benefits. 

US law stipulates retirement benefits only after completing 40 quarters or ten years of work in the country. 

The overall retirement benefits paid by Indians could be much more if one takes into account contribution by professionals in areas of medicine, financial services and consultancy, among others. 

Over 200,000 Indian professionals working in the US lose as much as 20 per cent of their salary through deductions for social security retirement benefits, which goes to the US treasury. 
PM Manmohan Singh is likely to visit the US in September to take up this issue. 

"It is absurd to keep savings of individuals. The US issues only temporary work permits for 3-6 years. The social security deducted from salary should be returned when you leave America," says a Bangalore-based software engineer. 

He says family compulsions forced him to return to India, but in the process, he lost six years of social security contributions. 

"We should strongly push for a 'totalisation' agreement with the US, as signed by 20 countries. This will enable repatriation of social security savings to Indians," says Amit Mitra, secretary-general, Ficci. 

Mitra was not eligible for social security as he returned to India after working in the US for nine years.
"In the interim period, till a pact is agreed upon, the US should allow repatriation of social security for those going on temporary visas," says Mitra. 

Industry observers maintain that the US has not signed a treaty as India does not have a social security system in place - more than 85 per cent people work in the unorganised sector. 

Unlike Indian employees in the US, Americans employed in India are eligible to withdraw provident fund contribution when they change job or leave the country. 

Big losers are Indian IT professionals and financial consultants who go to the US for 3-4 years. 

IT companies like Infosys and Wipro too share the loss as they contribute a portion of their employees social security in the US. 



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