Low-cost pension scheme gets first large subscriber in MP govt

The proposed low-cost pension scheme designed by the industry regulator is set to take off in a couple of months with its adoption by Madhya Pradesh. The scheme will use the low-cost architecture of the new pension scheme and financial contribution from the state government to create a retirement corpus for the poor.

The state government will make a matching contribution to the pension account of an individual, while the National Securities Depositories Ltd (NSDL) would keep the records of the scheme’s members for Rs 60-75 a year, Pension Fund Regulatory Development Authority chairman D Swarup said on the margins of a conference on pension policy organised by Invest India Economic Foundation.

“They (Madhya Pradesh government) are bringing in a whole lot of self-help groups into it. Similarly, several other state governments run co-contribution schemes...They would also automatically follow, because it (NPS) offers low-cost and flexibility,” Mr Swarup added.

The agency aims to extend the scheme’s coverage to the estimated 80,000 auto drivers in the capital. IIMPS’ micropension scheme is already available in nine states. PFRDA is the second agency that has devised a low-cost pension plan for the disadvantaged. The private sector pioneer in the field, Invest India Micropension Services (IIMPS) on Monday launched a scheme for auto drivers in the capital city in association with Nyaya Bhumi, an NGO which will match the subscriber’s contribution to the scheme above Rs 300.

State governments’ contribution to pension schemes will have a ceiling considering the burden it imposes on the state’s coffers. Rajasthan, for example matches a subscriber’s contribution up to a maximum of Rs 1,000 a year, said an IIMPS official.

While the cost of record keeping in PFRDA’s low cost pension scheme is in the range of Rs 60-75, the same for the New Pension Scheme is Rs 350 a year. The regulator is now signing in more customers. The country’s largest public sector lender SBI, which has about Rs 13,000 crore in a retirement scheme meant for its employees, has agreed in principle to transfer a part of this fund to NPS for management, Mr Swarup said. Firms like aluminium producer Nalco and HP Road Transport Corporation have also shown interest in NPS, which has been extended to the public in May this year.

SMART Invest Pension Plus disclose by Max New York Life

A unit-linked retirement solution that offers accumulation option through limited pay
The SMART Invest Pension Plus plan. Max New York Life Insurance has launched its retirement solution, India-based insurance company.
The plan also gives up to 300% of the premium as maturity bonus depending upon the term of the Plan. It is a unit-linked pension plan that offers increase option through limited pay.
This feature is also beneficial for younger people who could channel’s their bulge sum income, such as bonus towards retirement planning. SMART Invest Pension Plus plan intends to offer the customer a choice of limited pay option. This feature entitles the customer to a five-pay term of a minimum of INR50, 000, enabling them to plan for retirement plan in an efficient manner.
Smart Invest Pension Plus offers maturity bonuses at end of the policy term to customers who have been determined. The company claims that the plan offers a growth potential, as from 1st policy year itself, 100% of premium is allocated into the funds of customer’s pick. Depending on the policy term..
Smart Invest Pension Plus also allows a premium indexation feature. In case the customer decides to change to level or fixed premium, he will be able to do so after the policy completes 3 years, by informing the company and can continue payment of fixed premium every year. This ensures that the customer is able to start retirement planning early. It enables the customer to enter the plan at a lower premium and then keep increasing the premium by 5% (of the initial premium) every year over the policy term.

Shriram Life disclose pension plan

Shriram Pension Plan — Shriram Life Insurance (SLIC) today launched a unit-linked premium plan —which gives clients varied options to invest their money and receive maximum returns post-retirement.

The company said in a statement here. The plan would have a unique feature of no life cover, thus providing clients who did not require further life cover (or did not qualify for life cover for medical reasons) with the option of a savings-only scheme. The plan also offers investment in low-risk funds such as Secure Plus (a debt-linked fund for those desiring stability) and Tyaseer Fund, a Shariah-friendly investment fund. Another feature under the plan is auto transfer. Under this, the risk of investing the full premium into a fund is reduced by allowing the premiums to be invested in a low-risk fund (Secure Plus) instead, and regularly transferring the money into the special investment portfolio.

Shriram Life CEO (New Channel) Gerhard Joubert said. “With this plan, we aim to provide our clients with varied options to invest their money so that they can receive maximum returns in their future,”

Joubert said. “Our product is only for pension seekers and should not be confused in any manner with a life insurance cover concept, therefore no life insurance cover is provided, it is a savings-only vehicle,”

Being a pension plan, clients will also enjoy tax benefits under section 80CCC of the Income Tax Act.

Shriram Life Insurance is a joint venture between the Shriram Group and Sanlam, a leading insurance company of South Africa.